The strong demand for new houses over the past three years will continue until at least 2002. I'm not convinced that prices have been rising as sharply as some estate agencies have claimed. Starter homes prices are now only 5 to 6 per cent higher than at the beginning of the year. The overall picture was distorted by the widespread practice among house-builders of pitching launch prices below the market value for the first phase of any large housing development in order to underline the success of the scheme as well as keeping the bank manager happy.

I doubt the industry will be able to complete the forecasted 50,000 new houses by the end of this year because of a shortage of skilled labour. There are strong indications that prices will rise by another 5 per cent by year end because of higher wages in the industry and the strong demand on the ground. In most cases, starter homes booked now will not be completed until early next year. The new Government requirement that developers should hand over 20 per cent of their sites for social housing (something I doubt will ever happen) would put a premium on all housing schemes due to be completed before the Bill is due to come into force.