Housebuilders Called To Cable-Osborne Talks
The bosses of Britain's biggest residential developers have been summoned to summits with Vince Cable and George Osborne this week amid growing concerns about the UK housing market.
Sky News has learnt that the Business Secretary will hold talks on Tuesday with companies including Persimmon, along with representatives of leading industry bodies and mortgage lenders.
Two days later, the Chancellor is understood to be planning to meet executives from several housebuilders to discuss issues including the bottleneck in the supply of new housing stock.
The meetings will take place amid a growing political headache about the strength of Britain's housing sector and concerns that many first-time buyers are being priced out of the market despite the introduction of the Help To Buy scheme.
Last week, David Cameron defended the initiative, pointing to new powers held by the Bank of England which allow it to intervene to prevent the formation of market bubbles.
The Prime Minister said it was the responsibility of Mark Carney, the Bank Governor, to "call out any problems in our economy".
"We're helping young people who can afford a mortgage payment to get a home of their own, even if they don't have a rich mum and dad who can give them the deposit," he said.
"The housing market wasn't working for them, builders wouldn't build unless buyers could buy."
Sources at the Department for Business, Innovation and Skills described Mr Cable's meeting on Tuesday as "private" and declined to comment on the agenda.
Attendees will include Stewart Baseley, executive chairman of the Home Builders Federation; Paul Smee, director-general of the Council of Mortgage Lenders; Persimmon and McCarthy & Stone; Nationwide; the Homes & Communities Agency; and the NHBC, which provides insurance and warranties for new homes.
Mr Cable has been voluble in warning about the housing market, saying recently: "I am very concerned by the buildup of household debt in relation to income. That was one of the underlying factors in the buildup to the financial crash.
"A lot of people have paid off their debt but the projection is that it is going to start rising rapidly and surpass the previous levels. This is almost entirely a housing story.
"I do worry about a new surge in house prices with all the practical consequences of that. It is a particular London phenomenon."
Housebuilders have warned in recent months that an industry target to construct 200,000 new homes annually is unrealistic, despite a significant increase since Help To Buy was launched.
The Chancellor is said to be concerned that a shortage of new housing could be a significant millstone for the Conservatives at next year's General Election.
The names of those attending the meeting with Mr Osborne was unclear on Monday, and the Treasury declined to comment.
Listed housebuilders have seen their share prices soar on the back of robust market conditions, capping a remarkable turnaround for the sector.
A number of major firms, including McCarthy & Stone, were seized by their lenders after falling into financial trouble in the period before the financial crisis, as loan impairments soared.