For sale: too many flats, not enough houses

Blame the cost of land for one of the reasons houses are more expensive than flats. Land cost determines most of the selling price.

An acute shortage of houses is driving the boom in the property market while at the same time developers are being forced to build a "tidal wave" of new flats which they are struggling to sell.

John Prescott's policy is blamed for the shortage of houses

The latest Government figures show that the price of a family house has risen at eight times the rate of a new flat since 2000.

Last night building experts and the Conservatives blamed John Prescott for a policy that has made it increasingly hard for families to move up from a flat to a house.

The boom of recent years has disguised a discrepancy between the soaring prices for new houses compared to a relatively sluggish performance for new flats. A major reason for the gap is developers being encouraged to build apartments at the expense of family homes.

Since 2000, when the Deputy Prime Minister introduced controversial planning regulations, the number of detached, semi-detached or terrace homes being built has fallen, with 21,000 fewer built last year than in 2000, according to the National House Building Council.

This shortage has caused the cost of a detached house to double to £313,000 while the price of a new flat has climbed just 11 per cent to £188,000, according to statistics from the Land Registry. House prices and people’s incomes