House prices in South East spiral further out of reach - 29/06/04
New analysis from the National Housing Federation South shows house prices in the South East have spiralled further out of reach for the majority of the population.
The National Housing Federation has analysed official Land Registry figures to work out an affordability ratio for homes compared to incomes in the South East. The average house now costs 6.85 times the average income in the region. The average house price in the region is £199,073 while the average income is £29,067.
In 19 of the 67 local authority areas in the South East - nearly one third of areas - house prices went up faster than the average. Since the start of 2000, house prices have risen 74% in the South East as a whole, according to the Land Registry, but regional earnings have only gone up 32%. Lowest quartile prices (the cheapest homes to buy in an area) have gone up even faster - an 89% increase since the start of 2000.
In 33 local authority areas in the South East - half of the entire region - buyers need an income of more than twice the regional average to afford to buy the average home. That means even couples both earning the average wage cannot buy in nearly half of the South East on normal mortgage lending criteria. The situation is particularly bad in parts of Surrey and Buckinghamshire, where in some areas people need an income of £90-100,000 a year simply to afford the average priced home.
According to new research from homelessness charity Shelter, the South East is now the second most unaffordable region to buy a home in the country. It is now nearly 50% harder to buy a home in the South East than in 1994, compared to a national average of 42% harder. South East first time buyers are also paying a higher percentage of their income in housing costs than people in almost any other region - over 21% compared to an average of under 18%.
Key workers are particularly disadvantaged in the South East. A well qualified nurse now needs to find over eight times her income to buy the average home. Teachers and police officers are struggling with prices between 6-7 times their incomes, while ambulance staff are paying nearly 10 times income for a home.
New statistics from the Department of Constitutional Affairs show repossession orders gained by banks and building societies rising again and back up to the levels of a few years ago. The South East has seen a 23% rise in repossession orders on a year ago, with far higher figures in some counties.
Last week the Governor of the Bank of England warned of the possibility of another housing market crash.
Bernadette Stokoe, Head of South Region for the National Housing Federation, said “Housing associations and local councils are seeing their housing waiting lists grow and grow as more people are unable to afford to meet their housing needs through the market. Affordable housing supply is simply not keeping up with demand, as more and more people are priced out of the market.
“This is a serious problem for the economic future of the South East. Without a good supply of housing at prices and rents people can afford to pay it is very difficult for our companies to recruit and retain staff and stay competitive. We need to at least double affordable housing supply in the South East in coming years.”
Miranda Oakley, Marketing and PR Manager at Thames Valley Housing, said, “As a major provider of affordable homes in the South East, we are experiencing huge demand for our affordable home ownership, key worker and rented housing. We recommend anyone interested in affordable home ownership contact their local council to register. The sooner your name is on the list, the better your chance of finding a home.”
Ends.
Notes for editors
1. Key workers (e.g. teachers, nurses) should call 0845 600 6699 for an information pack about the Key Worker Living scheme.
2. Other people interested in affordable home ownership or rent should contact their local authority housing department if they are interested in registering. Details of some Thames Valley Housing homes for rent or shared ownership can also be found at www.tvha.co.uk
3. Comparative house price and income figures to local authority area level in the South East are available from the NHF on 01273 777445.
4. The affordability ratio has been produced by taking the Land Registry house price and examining the local average income against the normal mortgage lending criteria of 3.5 times income (assuming a 5% deposit from the buyer). In every single local authority in the South East house prices are unaffordable to the average single buyer income household on this basis.
5. The figures take the latest published average salaries from the Office for National Statistics (April 2003) and house prices at the end of 2003.
6. The National Housing Federation is the trade body for over 1,400 housing associations, which produce affordable housing for rent and shared ownership. In the South East the Federation’s members manage over 300,000 homes for around half a million residents.
7. Copies of ‘The Evidence Update’, key housing facts & figures for the South East are available from the National Housing Federation or on our website at www.housing.org.uk/south
8. The Shelter figures are published in the July/August edition of their magazine ROOF in the form of an affordability index.
9. The repossession order statistics for the first quarter of 2004, plus the historical trend, are on the Department of Constitutional Affairs website.
Further Information
Peter Simmons, NHF Press & PR Officer - 01273 777445 - peters@housing.org.uk
Miranda Oakley, Thames Valley Housing Marketing & PR Manager – 020 8607 0622 - miranda_oakley@tvha.co.uk
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