This is Bristol --HOUSEHOLDERS could be facing a price crash when the housing bubble bursts, according to one of Bristol's most successful businessmen.
Peter Hargreaves was speaking as he revealed the investment firm he co-founded, Hargreaves Lansdown, reported profits of £195.2 million for the year to June 30, up 28 per cent.
While many commentators are feeling optimistic about the economy, Mr Hargreaves warned of a return to "boom and bust".
"This is a property driven recovery," he said.
The Government is trying to help the housing market with schemes such as Help to Buy, which offers loans of up to 20 per cent of the value of a new-build home to bridge the gap between a deposit and what the bank will lend.
And from next year it will also offer mortgage guarantees for people with as little as a five per cent deposit on new or old houses.
Mr Hargreaves said: "The Government has decided that property prices going up will revive the building industry, which mops up unemployment and makes people feel better because their house is worth more.
"But I would like to see property prices 30 per cent lower then they are now. That would allow young people to be able to afford to buy.
"It's not a sustainable recovery – it's a boom and bust economy.
"At some stage property will become so expensive that nobody can buy it. People who have to sell will have to do so at lower prices and we will have negative equity again and we will fall back into recession."
Mr Hargreaves said instead of inflating the property bubble, the Government should focus on cutting red tape for business.
"We employ 30 people just because of regulation. It's mad," he said.
"There should be one employment law – that you are not allowed to employ lazy devils.
"It would create thousands of jobs if we had no labour regulation – every company in the world would be coming here to build a factory."
Not everyone agrees with Mr Hargreaves' assessment of the economy.
James Crumpton, residential sales manager at Connells estate agency's Filton office said: "I don't think the market is going any way but up at the moment. How long that will last, who knows? But I don't think there's going to be a pop."
Mr Crumpton said if the market did fall, he did not believe it would be a dramatic drop.
He added that areas surrounded by good employment, such as Filton with big companies like Airbus and GKN nearby, would always maintain strong house values.
Martin Haigh, founding partner of Haigh & Sons estate agency in Westbury Park, said buyers should not panic as even in the event of a future recession, Bristol was well placed to come through.
He said: "There are reports about the possibility of a property bubble that may burst in a couple of years. The jury's out on that.
"But Bristol is quite well placed compared to other parts of the country. It's a stable place to live.
"We saw that with the credit crunch. Property sales fell but we didn't seem to be as badly affected as the rest of the country."
A Treasury spokesperson said: "Balanced growth is helping the British economy move from rescue to recovery and recent data shows that growth has been generated by all sectors of the economy.
"The Government is also determined to help people fulfil the dream of home ownership. The Help to Buy mortgage guarantee is designed to support prospective first-time buyers and families hoping to move somewhere larger. Many can afford repayments but are struggling to save the large deposits banks now require.
"The Equity Loan component of Help to Buy has already been a success, with more than 10,000 reservations in the first four months." Reported by This is 2 hours ago.
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This is Kent -- THE Sheppey Crossing has now fully reopened after a multi-car crash today. More than 200 people were injured - 27 of which were taken to hospital for further treatment. It was reported up to 140 cars were involved in the crash because of the heavy fog this morning at 7am. There were no fatalities. *View our pictures below of the shocking incident*
Reported by This is 4 days ago.
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This is Nottingham -- Police have closed Sherwood Rise after a car crash. Two cars were involved in the incident which happened at around 2.45pm. A police spokesman said the crash was not serious. He added: "The road will reopen shortly."
Reported by This is 16 hours ago.