Homes 'more affordable for workers'

23 May 2009 02:33am

The number of towns in which key workers can afford to buy a home has increased seven-fold since house prices first started to fall, research has revealed.

Key workers, such as nurses, teachers, fire fighters, paramedics and police officers, can now afford a typical property in 21% of towns in the UK, up from just 3% when house prices peaked in 2007, according to mortgage lender Halifax.

The group said all five groups of key workers had seen improvements in the number of places where they could afford to buy a property, with police officers seeing the biggest change, with homes in 37% of towns now within their reach.

Teachers have also seen a substantial improvement in affordability, and could now buy a home on a single salary in just over a quarter of towns, up from only 6% in 2007.

Fire fighters and paramedics have also seen moderate improvements in the number of places they could buy a home, but nurses continue to suffer severe affordability problems.

The average nurse could afford to buy a property on a single salary in just 3% of towns, only a slight improvement on the 0.4% of places with affordable property in 2007, despite house prices falling by more than 20% since then.

Martin Ellis, Halifax housing economist, said: "There has been an improvement in housing affordability for key public sector workers across many parts of the UK since house prices reached a peak in 2007.

"Nearly one in six towns has become affordable for the average key worker since then due to a combination of lower house prices and increased earnings. Despite this improvement, housing in the majority of towns remains unaffordable for the typical key worker."

The biggest improvement in affordability has been in Billingham in the North East, where the average house price to key worker earnings ratio has nearly halved from six to 3.7, with Deeside in Wales seeing the next biggest improvement with a fall in the ratio from 5.7 to 3.7.

Overall, Yorkshire and the Humber is the most affordable region for key workers, followed by Scotland, Wales, and the North West. Greater London and the South East are the least affordable, but these regions, along with Northern Ireland, have seen the largest fall in the house price to earnings ratio for key workers, with this falling from nearly nine in the capital in 2007, to 6.4 now.

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