The UK property market is likely to bounce back before those of other countries because “we failed” to build enough houses, Gordon Brown has said.

The prime minister told a City audience the US and Spain had “overbuilt” homes during the years of rising prices.

In contrast the UK had a “pent-up demand”, as not enough had been built.

He said the UK problem was not shortage of demand for homes at “the right prices” but a shortage of mortgages “at the right prices for people to buy”.

Mr Brown was speaking during a question and answer session at Reuters in London after a speech focusing on the £37bn bank rescue plans unveiled earlier on Monday.

Spain and US

The package – which also includes guarantees of inter-bank lending – is designed to restore financial stability and to encourage the resumption of more lending to business and to people who want mortgages.

Property prices have fallen from record highs over the past 12 months in the UK and in many other countries.

Mr Brown’s government had been seeking to increase the numbers of homes being built in recent years, but the prime minister admitted that “we failed over many years to build enough houses to meet the need that was there”. Full Article