More working families squeezed out of house buying

Fewer than 1 in 10 homes on the market are affordable for working families in more than half the country, a study shows

Research by Shelter reveals the full extent of England’s housing shortage. In more than half the country, less than 10% of the suitable homes for sale are affordable for a typical family hoping to get on the first rung of the property ladder.

The charity looked at asking prices for all of the properties for sale in England on a single day, and compared them with the mortgage that families, couples and single people on average wages could afford as first time buyers.

The results reveal a shocking picture. In over a third of local authority areas, more than 95% of homes on the market were unaffordable for families – even assuming that they were able to save a large 20% deposit.

In some parts of the country, there were fewer than 10 homes for sale that were affordable in an entire local authority area.

The problem isn’t just confined to the South East, with places such as West Somerset (2% affordable), York (3% affordable) and Warwick (4% affordable) all showing a tiny number of homes available for families on average wages.

The research also uncovered several affordability black-spots, where there were no affordable properties for sale at all. This includes Brighton & Hove where none of the 1662 homes for sale were affordable for families on average wages, Cambridge (197 homes for sale, none affordable) and Brent (1511 homes for sale, none affordable).

The picture is even bleaker for families looking to take part in the government’s mortgage guarantee scheme, Help to Buy, where a 95% mortgage would mean higher monthly mortgage costs, and put even more homes out of reach.

Previous research commissioned by Shelter showed that on average young families face over a decade of saving before they can afford the deposit for a home of their own. This new study shows that, even with a large deposit, there simply aren’t enough properties on the market that first time buyers can afford.

This means that the reality for many will be years spent in expensive and unstable private lets, often forced to jump from one short tenancy to the next and unable to put down roots.

The situation is even worse for single people looking for a home of their own; in over 80% of the country less than 10 in every 100 homes on the market were affordable.

For couples without children this was true in just over 15% of the country, with fewer than 6 in every 100 homes for sale affordable in 20 areas. This included St Albans, Epping Forrest and Horsham as well as 10 London boroughs. It is little surprise therefore that recent Census data showed a drop in the number of home owners in England for the first time since records began, a trend likely to increase as more people are priced out of the property market and forced into unstable private renting.

Shelter is warning that unless the Government tackles the root cause of our housing crisis – the desperate shortage of affordable homes – things are only going to get worse. This will not only affect future generations hoping for a stable home, but also the thousands of families already facing an everyday struggle to pay their rent or mortgage.

Campbell Robb, Shelter’s Chief Executive, said: “When the number of affordable properties in an entire town can be counted on one hand, it’s not difficult to see why a stable home of their own is quickly becoming a distant dream for the next generation.

“It’s right that young people who aspire to own their own home should work hard and save each month, but with such a pitiful number of affordable homes on offer – even with a generous 20% deposit – our housing shortage is holding them back.

“Unless we build the affordable homes we desperately need, house prices will continue to rise and as a result more people will be forced to live at home with their parents into their thirties, or move into the expensive and unstable private rental market.

“Young people are working hard and doing their bit. Now the Government has to meet people halfway and increase the supply of affordable homes – not the supply of credit – or the prospect of a home of their own will slip even further out of reach for future generations.”

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