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Generation locked out of broken market in east of England as average property price rises to over £237,000, report shows
An entire generation of people may be locked out of the housing market as average housing prices in Bedfordshire are nearly ten times the average wage, according to a new report.
Grand Union Housing Group, (GUHG) parent company for Aragon and MacIntyre Housing Associations and South Northants Homes, joined social housing providers across the east of England in backing the National Housing Federation’s Home Truths report.
The report reveals the average worker in the east of England would have to save every penny from their pre-tax salary for almost three years just to raise a £59,000 deposit required to buy an average priced property at £237,668.
Across Bedfordshire average property prices are:
· Central Bedfordshire UA £223,526 – 9.1 times average local income
· Bedford UA £218,045 – 10.0
· Luton UA £160,361 – 8.3
Alan Humphreys, Group Chief Executive of Grand Union Housing Group, said: “There’s no doubt we are seeing increased pressure on social housing as more and more people are squeezed off the private property market by high prices and rising private rents. We urgently need the Government to rethink its investment in creating new affordable homes.”
GUHG is joined by bpha and Aldwyck housing associations in calling for the Government to build more affordable homes.
In Central Bedfordshire, a £47,898 salary is needed for an average price property and £32,357 for a £151,000 lower value home. In Bedford, it’s a £46,724 salary for an average price property, and £29,998 for a £139,995 lower value home. In Luton, it’s £34,363 salary for an average price property, £26,679 for a £124,500 lower value home.
The Federation’s Claire Astbury said: “Bedfordshire has become unaffordable for ordinary hardworking people who have little realistic chance of buying their own house, triggering even greater demand for good social housing or a desperate search for a home in the more expensive private rented sector.
“Ministers should make a renewed commitment to building the affordable homes we need and identify housing as a key driver for economic activity. Housebuilding is a crucial part of economic recovery, creating real jobs.”
The Federation, which represents England’s housing associations, is warning that huge social housing waiting lists and sustained high prices are making it desperately hard for younger people and low-to-middle income earners in urban and rural communities. And the chronic under-supply of homes threatens to get worse as the number of new households requiring homes in the East of England is set to rise 34% by 2033, the largest in the country.
The report, called ‘Home Truths East of England’, shows that the average property in the overall region now costs 10.8 times the average income of £21,923. A salary of £50,929 is needed to obtain a 75% mortgage at 3.5 times income while the cost of renting a home in the private sector is expected to rise by more than 21% in the East – the second largest rise in the country.
Even buying a lower value home (a property in the bottom 25% of prices) for £145,000 requires an average salary of £31,071.
Launched at the House of Commons, Home Truths also showed:
· 155,900 households are on the social housing waiting list, up 59% since 2000
· Over 4,220 households were accepted as homeless by local councils in 2010/11, up 15% from the previous year and the first increase in homelessness since 2004
· The number of people aged 65 and over is expected to rise by 65% in the East by 2033 and the population aged 85+ by 149%, the second largest rise of any region
· The proportion of households owning their own home in the East is expected to drop from 71% today to 64% in 2021.
Claire Astbury added: “Our report shows we need a reformed planning system that supports the building of affordable homes and the use of suitable surplus public land to build on. The need for new affordable rented housing has never been greater. The region’s population is getting older and the right homes and support are needed to respond to this key demographic change. Rural communities need affordable housing to survive, yet alone thrive, with the closure of village schools, shops, pubs showing no signs of slowing down.”
Average house prices for counties and unitary authorities across the region are:
· Hertfordshire £317,376 – 12.1 times average local income
· Essex £247,062 – 11.0
· Cambridgeshire £239,143 – 10.1
· Central Bedfordshire UA £223,526 – 9.1
· Southend-on-Sea UA £211,140 – 9.7
· Suffolk £206,106 – 10.6
· Norfolk £189,952 – 10.4
· Thurrock UA £181,786 – 8.1
· Peterborough UA £155,751 – 8.2
The Federation, which represents England’s housing associations, warns that huge social housing waiting lists and sustained high prices are making it desperately hard for younger people and low-to-middle income earners in urban and rural communities.
And the chronic under-supply of homes threatens to get worse as the number of new households requiring homes in the East of England is forecast to rise 34% by 2033, the largest in the country.
Affordability remains a huge problem across the region. The house price divided by average local income ratio show the five most unaffordable places are:
· Uttlesford, Essex 15.6 (£335,952 average price)
· Hertsmere, Hertfordshire 15.4 (£373,700)
· St. Albans, Hertfordshire 14.2 (£420,396)
· Three Rivers, Hertfordshire 13.9 (£393,228)
· Cambridge, Cambridgeshire 13.0 (£321,189)
And the five most ‘affordable’ areas are:
· Fenland, Cambridgeshire 7.3 (£144,202 average price)
· Ipswich, Suffolk 8.1 (£148,902)
· Thurrock UA 8.1 (£181,786)
· Peterborough UA 8.2 (£155,751)
· Luton UA 8.3 (£160,361)
Astbury said: “Our report shows we need a reformed planning system that supports the building of affordable homes and the use of suitable surplus public land to build on. The need for new affordable rented housing has never been greater.”
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