Housing minister reveals fears over property prices

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by Kay Murchie

Caroline Flint, housing minister, has revealed her fears about UK property prices. Ms Flint’s ‘leaked’ document revealed that house prices would fall by 5% to 10% ‘at best’ this year and that ‘we can’t know how bad it will get‘.

The document, titled ’Caroline Flint - speaking notes‘, had a sticker attached which said ‘Papers for Cabinet meeting 13 May 2008‘ was captured by waiting photographers outside Downing Street.

Commenting on the blunder, Ms Flint shrugged the incident off and said ‘these things happen‘. The notes reflected expert opinion and were not official forecasts, she added.

Ministers do not publicly issue forecasts on the housing market and Prime Minister Gordon Brown has previously shrugged off concerns of a crash.

A fall of 10% would shave over £20,000 off the value of the average house and put people at risk of being in negative equity.

Ms Flint’s briefing note conceded that the Government would struggle to hit its own targets on building new homes.

Yesterday, news from the Royal Institution of Chartered Surveyors (Rics) showed that the proportion of UK surveyors reporting falls in house prices has risen for the ninth consecutive month.

The Rics survey, which shows price falls more widespread than at any time since 1978, is further confirmation that the housing market slowdown is continuing.

Furthermore, according to the Council of Mortgage Lenders (CML), mortgage lending to first-time buyers and existing homeowners fell during the first 3 months of 2008 to its lowest level for 30 years.