Page last updated at 13:41 GMT, Sunday, 18 January 2009

Beckett talks of housing 'upturn'

Margaret Beckett
Concern about inflationary bubble in prices once economy picks up

Housing Minister Margaret Beckett has said that there is anecdotal evidence of a "bit of an upturn" in interest among homebuyers.

She told the Sunday Times there were "indications of certainly a maintenance of customer interest, possibly even a bit of a pick-up".

One poll suggests the number of buyers registering with estate agents has risen to its highest level since 2006.

But Tory frontbencher William Hague said she was "divorced from reality".

In her interview, Mrs Beckett said she was concerned about "inflationary pressures" if demand picks up before housing supply increased and warned: "When the upturn comes, there will probably be a mad rush."

'Pick-up'

Earlier this week the Royal Institute of Chartered Surveyors warned that property sales had fallen further in the three months to December - to their lowest level since 1978.

But it noted inquiries from new buyers rose for the second month in a row, driven by lower interest rates and cheaper homes.

Here they are, when tens of thousands of people are losing their jobs, talking about green shoots and housing booms
William Hague
Conservatives

Mrs Beckett told the Sunday Times: "We're hearing indications of certainly a maintenance of customer interest, possibly even a bit of a pick-up."

She added: "Some people have been saying the appetite to buy has gone through the floor, but clearly we've had this anecdotal evidence of a bit of an upturn in interest."

But Conservative frontbencher William Hague likened the comments to business minister Baroness Vadera's remarks earlier in the week that she could see "a few green shoots" of economic recovery.

"I think the problem here is that these ministers are clearly divorced from reality," he told Sky News.

"Here they are, when tens of thousands of people are losing their jobs, talking about green shoots and housing booms. I don't think they really understand what is going on out there."

The Liberal Democrats' housing spokeswoman Sarah Teather also said it was an example of "another minister engaging in some seriously wishful thinking".

"Nobody should talk the economy down but for the housing minister to talk of formulating strategies for dealing with the next housing boom when people are struggling to keep up with their current mortgage payments and many are losing their homes is insensitive in the extreme."

The Nationwide building society says house prices fell by 15.9% last year, taking the average price down to 153,048 - 29,000 less than a year ago.



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