Keith Miller, the Chairman of house-builder Miller Homes, said yesterday that the current problems in the housing market centred on the market for two-bed flats in which majors had rushed to expand in recent years.

He explained that while two-bed flats had been seen as the most profitable property type to build, the development of many big city centre schemes has left an overhang of properties weighing on the market.The properties are favoured by first-time buyers, who may struggle to get mortgages as lenders lose their appetite for risk.We're seeing a huge over-supply; there's lots in city centres.  That's where the problem lies," said Miller.

 .HALL says:  Keith Miller is one of Scotland’s best business men.  What he says should be listened to.   

We have some negative response from industry to our suggestion that house-builders should contribute to a fund to help first time buyers who fall into negative equity.  We are told - “Negative equity has little to do with individual developments and has more to do with economy-wide problems, and even then most people in that situation remain able to meet their mortgage commitments so it only becomes a problem when people move house.” 

Our response to this was - Negative equity has everything to do with house prices inflating too far.  We really do have to find a way of putting a stop to that.  We wish that it will only be a problem when people move house by choice– there are too many first time buyers who have short term fixed interest mortgages taken out on the assumption that house prices will continue to inflate, and causing the “credit crunch”.   Some may have to move house by force of circumstances. Making the house-builder responsible in some way may create more stability.  We think that there is a danger that the house-builders will been seen as the injured parties – whilst it’s the poor young people who have been stuck with a load of debt that we need to worry about.   

The Council should think long and hard about what M&M are proposing at Manse Crescent.  Why eight flats?  Could it be that the alternative is four semi-detached?  Are flats the icing on the cake?