Just one area left where homes are truly affordable.
Analysis by the Trades Union Congress (TUC) has suggested there is just one local authority area left in England, where average house prices are less than three times the average annual salary.
Over just 16 years, the number of ‘easily affordable’ local authority areas in the country has fallen from 72 to just one.
The last of its kind
The area in question is Copeland in the Lake District. House prices in neighbouring South Lakeland are eight times the average local salary, showing that the Lake District region as a whole isn’t anywhere near as affordable as Copeland.
Barrow-in-Furness, the second-most affordable area, now hovers at just above the ‘three times income’ mark, with a ratio of house prices to earnings of 3.04.
While affordability concerns are often centred on London and the South East (London boroughs have seen a prices increase by up to 32% over the last year according to Rightmove), this new report demonstrates that there is a countrywide problem of properties becoming out of reach for local people.
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Harder to get onto the housing ladder
In 1997, only one in ten local authority areas had average house prices that were more than five times local salaries. Previously ‘affordable’ areas are now out of reach for many buyers, with average house prices tending to climb well above three times average salaries.
In fact, 84% now have house prices which are on average more than five times local salaries. This is particularly problematic, says the TUC, because the Bank of England recently told banks to limit the proportion of mortgages they offer that are more than 4.5 times applicants’ salaries.
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Why is this happening?
The TUC believes that a combination of soaring house prices and stagnating wages have resulted in falling wages in real terms, meaning that houses have become increasingly difficult to buy for local people.
“London always comes out top when it comes to horror stories about ludicrously over-priced housing,” says TUC General Secretary Frances O’Grady, “but the toxic combination of rising property prices and falling real wages has meant that local housing affordability remains a huge problem for millions of people across the country.”
The only way out of the mire, she continues, is an “ambitious programme of home-building” to relieve pressure on the housing market – but in the time it takes to build those homes, renters are in need of a better deal.
How should the Government take action on the lack of affordable housing? Let us know your views using the comments box below.
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