Mon, 31 Jul 06
The average house is now an unattainable target for key public sector workers to buy in the majority of towns in Great Britain.
339 towns out of 519 (65%) surveyed by Halifax in their key worker housing review have average house prices above the unaffordable level. Five years ago, the average house in only 126 (24%) of towns was unaffordable for all key worker groups surveyed.
South West has no key worker affordable homes
Affordability for key workers is worst in the South West where the average house in all 34 towns surveyed is unaffordable for all five key worker groups.
Greater London and the South East is the next most badly affected part of the country with 95% of the towns and boroughs surveyed (179 out of 189) unaffordable for all key worker groups – up from 59% (111 towns and boroughs) in 2001.
The South West has seen the biggest increase in the number of towns where the average house is unaffordable for all key worker groups over the past five years - a rise of 85 percentage points from 15% in 2001 to 100% in 2006. There have also been substantial increases in East Midlands (up 61 percentage points), East Anglia (52 percentage points), Yorkshire & Humber (51 percentage points), West Midlands (50 percentage points) and North West (47 percentage points).
Gerrards Cross is the least affordable town in Great Britain for key workers followed by Weybridge. Lochgelly in Fife is the most affordable town in Great Britain for key workers.
Martin Ellis, chief economist at Halifax, commented: "Key workers have been hit hard by the strength of the property market over the past five years. Now it is difficult for key workers to buy the average house not only in the south of England but also in significant parts of the Midlands, northern England, Wales and Scotland."
"While flats are affordable for key workers in many towns outside southern England, it is becoming increasingly difficult for key workers to purchase a flat in many major cities including Edinburgh, Oxford and Cambridge and two thirds of London's boroughs."
"It is important that the government continues to develop schemes to help key workers onto the property ladder and to ensure that these schemes are not confined to southern England. The presence of sufficient key workers is critical to the smooth functioning of life in our cities and towns."
To determine which towns are unaffordable for key public sector workers Halifax analysed the house price : earnings ratio for each key public sector worker occupation in each town against the UK average first time buyer annual house price : earnings ratio in 2005. Where the ratio exceeds the FTB ratio across all occupation types it has been classified as an unaffordable town.
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