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Home ownership unaffordable - Cable
12:22am Friday 4th April 2014 in © Press Association 2014
Home ownership is becoming "unaffordable" for middle income families, Business Secretary Vince Cable has warned.
Home ownership is becoming "unaffordable" for middle income families, Business Secretary Vince Cable has warned, amid fears rising prices are stoking a new property market bubble.
In an interview with The Independent, the Liberal Democrat Cabinet minister said there were still not enough homes being built to satisfy the demand of people wanting to buy a place of their own.
"The fundamental problem is a chronic imbalance between supply and demand. A recovering mortgage market is just fuelling demand again," he said.
"A family on average income is nowhere near able to afford a house at the average price. Property has become much more unaffordable for people on middle incomes."
His intervention comes after a survey by the Nationwide Building Society found that the "house price gap" between London and the rest of the country was at its widest since records began in the 1970s.
Mr Cable hit back at the Conservative housing minister Kris Hopkins who suggested that rising house prices were a good thing.
"I do not agree with Kris Hopkins that rising house prices are a good thing," he said.
"If you are an owner-occupier who has paid off your mortgage, it is an increase in your paper or real wealth. But if you are a young family trying to get into the housing market and it is unaffordable, it is an extremely bad thing."
His comments will irritate the Conservatives. Chancellor George Osborne has previously rejected warnings by Mr Cable that the Government 's Help to Buy scheme - which provides 95% mortgage guarantees - is driving up prices.
Mr Osborne argues that the measure is helping families to get a first foot on the housing ladder, but Mr Cable said that the only answer was to build more homes.
"We have taken some very good measures in government like allowing those areas with severe need for additional housing to increase borrowing against their assets to build new houses. But more needs to be done," he said.
"We must build many more houses - that and only that is the solution to our housing problem."