Financial News

  • 31 July 2014, 16:02

Homes 13 Times Wage By 2020, Labour Warns

Homes will cost 13 times the average salary within six years, putting them out of reach of families and young people, Labour has warned.

In 2020 the average home will cost†£359,000 and require a £72,000 deposit if demand for housing continues to outstrip house building.

In a speech as part of Labour's summer campaign, shadow housing minister Emma Reynolds will also say 'Generation Rent' needs greater protection from ruthless landlords.

She says the number of homes that need to be built to meet demand is 1.3m - the equivalent of three cities the size of Birmingham.

Ms Reynolds will say: "While the Tories say the housing market is back on track, the truth is they've presided over the lowest level of house building since the 1920s.

"We're not even building half the homes we need to keep up with demand.

"The Government talk up the Help to Buy scheme but it's clear they simply haven't understood that boosting demand without boosting supply will simply see prices pushed out of reach of families and young people."

Ms Reynolds will claim Labour councils are planning to build 862 homes a year - significantly more than Tory or Lib Dem councils.

The Bank of England Governor, Mark Carney, has cautioned that house prices are the greatest threat to the UK economy.

Brandon Lewis, Minister for Housing and Planning, said: "This speech from Labour just isn't credible. Here's one fact they won't tell you - under the last government Britain was building fewer homes than at any time since the 1920s. Labour's record on housing was truly appalling."

It comes as Nationwide figures showed house prices increased by 0.1% month on month in July to another all-time high of an average price of†£188,949.

Labour began its summer campaign nearly a week ago when Ed Miliband gave a speech claiming he would be a Prime Minister of substance and principle, not of photo opportunities.

On Monday shadow home secretary Yvette Cooper spoke out on domestic violence, on Tuesday shadow housing minister Andy Burnham attacked the Tories record on the NHS and Wednesday saw shadow chancellor Ed Balls talking bankers bonuses.

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