Some counties have average house prices more than 10 times higher than wages
In some shire counties the average house price was 14.5 times higher than average annual wages in December 2018, an analysis from the County Councils Network (CCN) based last week’s Housing Price Index has found.
The national average is 8.2. Property prices in England’s largest cities and towns were six times annual wages, far less than the county average.
The average house price in the country’s 27 counties is some £100,000 more than in urban areas outside of the capital.
Cllr Philip Atkins, County Councils Network spokesman for housing, planning, and infrastructure, and leader of Staffordshire County Council, said: “We have long been concerned that house prices in county areas are becoming increasingly unaffordable, with millions of young people locked out of home ownership and the situation rapidly worsening.
“Building a variety of homes, more quickly, with the right infrastructure to support development will help ease the affordability crisis that is spreading from London.
“The government’s drive to tackle this issue is welcome but planning reforms to date do not go far enough – bolder change is needed to deliver the homes the country desperately needs.
“If we are to build the right homes, in the right places, with the necessary infrastructure, then we need to move towards strategic planning on a county scale, working with district partners and neighbouring authorities.
“To that end, we recommend that rural areas have the same planning powers that are currently only on offer to urban metro mayors, such as allowing them to prepare their own strategic plans, to help deliver more houses in England’s counties.
“At the same time, we would encourage more ‘housing deals’ outside of city areas.”
Leaders of county councils said a ‘fragmented’ planning system is holding back development in county areas, pushing up house prices.
This is compounded by annual wages in those areas being £1,700 lower than the national average.
In 27 ‘two-tier’ shire areas, smaller district councils are responsible for planning and housing, but the county council in each of those areas is responsible for the infrastructure for these developments, such as parks, roads, public services and amenities.
Those leaders said they want to work in closer collaboration with district partners to deliver more homes.
The counties with the largest house prices to yearly wage ratios were all in the South East: Cambridgeshire (14.6), Surrey (14), Hertfordshire (12.8), Buckinghamshire (12.8), and West Sussex (12).
In each of these areas, the ratio has widened since 2016, when Oxford Economics did a similar survey for CCN. In contrast, the top five urban areas outside London were: Southend (10.5), Bristol (9.6), Bournemouth (8.6), Portsmouth (7.3) and Southampton (7.1).
Just nine out of the 27 county council areas had a ratio that is below the national average. The average house price in rural areas is now £270,923 as of December 2018, up on £262,390 in 2017. The average house price in the cities and towns is £170,212.
Earlier this month, a report from the National Audit Office argued that the planning system is ‘underperforming’ in respect to the government’s housebuilding targets. CCN has long called for a return of ‘strategic planning’ powers to county areas, as part of a rebooted devolution agenda.
County leaders have advocated a return to strategic planning, which was scrapped in 2012, replaced with a much looser requirement for district and county councils to work together to plan for economic growth.
The current government has signalled a return to encouraging local authorities to join up local plans and infrastructure proposals on a larger scale, but no formal proposals have been set out.
CCN chairman Cllr Paul Carter will speak at a national housing conference from thinktank Onward, where he will call for strategic powers for counties and stronger planning reform, including reforms to developer contributions, from the government.
Compounding affordability issues within shire counties is a lack of properly financed infrastructure for development.
Atkins added: “A closer alignment of planning and co-ordinated infrastructure provision across a county-wide geography will enable us to overcome the current fragmented approach to the planning system and build more homes and genuinely sustainable communities.”
“Many councils also face the added issue of having huge infrastructure funding gaps – running into billions in some areas in the south-east.
“A lack of adequate funding for roads, amenities, and public services to mitigate large-scale development is a barrier to unlocking development in some areas. Further reform to developer contributions and the way that this funding is distributed between councils is needed.”
With average yearly earnings in county areas £27,878, CCN has called for the government to devolve skills and growth powers to county areas so they can begin to address skills, wages and productivity shortages.
Pictured is Cambridge