Germans urged to buy into the home front

ADRIAN BRIDGE

Central Europe Correspondent

An Englishman's home may be his castle, but a German's is not necessarily his Schloss. That, however, is something the German government wants to change.

Bonn has launched a new initiative aimed at getting more people to build or buy their homes rather than, as at present, renting them. Germany's level of home ownership is one of the lowest in Europe - about 40 per cent of the population, compared to 70 per cent in Britain According to the building ministry, the cost of building new houses in Germany is up to twice as much as in the Netherlands, Britain and even Scandinavia.

Klaus Topfer, the building minister, wants construction costs to come down drastically, enabling first-time buyers to get an early foot on the property ladder. He is also urging his countrymen to lower their sights: rather than expecting luxurious mansions, they should be content with more modest housing, he says

The aim of easing the path to home ownership has been widely acclaimed. But many Germans remain sceptical about the extent to which the government can influence the country's relatively high house prices.

As an editorial in the Westdeutsche Allgemeine Zeitung put it: "We fear that Mr Topfer's new efforts will have only a limited effect. Demand dictates prices in the free market - not the wishes of Bonn."

Announcing his new initiative on Tuesday, Mr Topfer said that his eventual aim was for more than half of German households to own their homes. In particular, he said he wanted to see couples with children opting to build or buy.

The minister proposed a number of measures aimed at bringing prices down. These included the release of more low-cost land for building, the simplifying of planning procedures and building regulation, and the introduction of more competitiveness between constructing firms.

Mr Topfer said his measures could reduce building costs by as much as 40 per cent, bringing down the price of a new family house to between 150,000 and 200,000 German marks (pounds 60-pounds 90,000)

A vital precondition for lower prices is that Germans content themselves with more modestly-sized houses (the above prices apply to homes of approximately 100sq metres or about 100sq yds) and cheaper materials and fittings than is currently the norm.

"People have always clamoured for cheaper houses, but at the same time want the most luxurious kitchens and the most expensive designs: of course it is impossible to have both," said Cosima Ningelgen, a building ministry spokeswoman. "Most Germans who buy their own houses have saved up for them for many years and see them in terms of for ever. They see them as places they will probably pass on to their children, not as temporary homes."