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Labour says coalition has hit housing confidence

Confidence in the housing sector has been severely damaged by the coalition Government’s economic policies, Labour MPs have claimed.

At a Westminster Hall debate on the spending review’s impact on housing last week, Labour MP Nick Raynsford said people were facing the bleakest outlook in the housing market for four decades.

He said: “Confidence in the private housebuilding industry has been severely damaged over the past five months by ill-thought-out changes to the planning regime, a continuing mortgage famine, fears about rising unemployment and severe cuts to the Homes and Communities Agency budget.”

Shadow housing minister Alison Seabeck said of the 150,000 homes the Government wanted to build over the next four years, 67,000 were carried over from Labour’s plans and the rest would not be affordable properties.

Communities and Local Government minister Andrew Stunell accused Labour of spreading “lies and deceit” over the impact of coalition policies. He said the National Housing Federation described the plan for 150,000 homes, with a quarter affordable, as deliverable. He said reform was needed because Labour’s targets had failed and built resistance in communities.

Raynsford, who worked under John Prescott in the office of the deputy prime minister which was responsible for Labour’s centrally set housing targets, said the Government must do more to provide affordable homes and mortgages.

Tory MP Tony Baldry said increasing availability of mortgages is the first hurdle in getting housebuilding out of a Catch-22 caused by the construction industry waiting for the market to pick up. He said: “If people cannot get mortgage funding, they will not buy new homes and developers will not develop the site.”

Raynsford forced Stunell to backtrack on whether the new homes bonus, an incentive for councils to accept more planning applications, would apply to all new homes or net new homes.

Stunell told Raynsford it is a “new homes bonus” and he should trust the words of the housing minister. But later, he said: “It will apply to conversions, change of use and other net gains. I am quite content to confess that my adrenaline got the better of me earlier.”

Stunell retracted his “lies and deceit” comment the next day saying he had used language which was inapproriate and not parliamentary.

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