Housing affordability returns for key workers

Nia Williams

May 13, 2013

The Halifax found that 38% of towns are now affordable for home purchase by key workers, compared to just 4% in 2008.

The improvement in the past year has come largely as result of house price declines in northern areas.

Nonetheless affordability remains below the 2003 level when the average house was considered to be affordable in 43% of towns.

Martin Ellis, housing economist at Halifax, said: “Nationally, there have been considerable improvements in the ability of key public sector workers to purchase their own home since the start of the housing downturn with 38% of towns now being deemed affordable to buy compared to just 4% in 2008.

“The greatest concentration of affordable housing is found in towns in northern England, Scotland and Wales.

“However there are still significant affordability issues for key workers in London and the South East.

“A combination of declining or static house prices in many areas, combined with some growth in earnings, has contributed to the improvement in housing affordability since 2008.

“However, significant house price growth in the past decade as a whole has meant that housing is still unaffordable in more than half of the towns surveyed.”

All key worker occupations analysed – fire-fighters, nurses, teachers, paramedics, and police officers – have seen large improvements in the affordability to buy in the last five years.

Nurses have seen the number of affordable towns increase from 7% to 35%, teachers have seen an increase from 11% to 40% and fire fighters have seen an increase from 1% to 31%.

However, the largest gains have been made by the police (18% to 49%) and paramedics (18% to 50%).

Overall 20 towns have become affordable in the last year but 11 have become unaffordable. Among those which have become affordable are Bathgate in West Lothian, Grantham and Margate.

The region which has seen the greatest number of towns – six – switch from unaffordable to affordable is Scotland.

At the other end of the scale the West Midlands saw the most towns – five – become unaffordable for key workers.

There are currently four regions which have an average house price to key worker average earnings ratio of less than 4.0, in 2008 there were no regions where the average priced home was affordable for key workers.

The lowest house price to earnings ratio for key workers in Britain is in the North (3.64) followed by Wales (3.85), the North West (3.87), and Yorkshire and the Humber (3.93). London (7.64) and the South East (6.72) have the highest ratios and are, therefore, the least affordable regions for key workers to buy a property.

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