Latest research from Halifax shows that housing affordability has improved considerably for key public sector workers since house prices peaked in September 2007.
The Halifax survey shows that two in five towns (41 per cent) are now affordable for the average key worker, based on the ratio of average house prices to average earnings. Where the ratio is below 4.0, housing is deemed affordable. In September 2007, homes in just three per cent of UK towns – 12 towns in total – were affordable for key public sector workers, demonstrating a significant improvement since 2007.
Martin Ellis, housing economist at Halifax, commented:
“Housing affordability for key public sectors workers has improved significantly across the UK since house prices peaked in 2007. More than four in ten towns are now affordable compared with just three per cent in 2007. The greatest concentration of this improvement has been in northern England, Wales and Scotland. There are still considerable affordability issues for key workers in London and the South East.
“A combination of house price declines and growth in earnings has contributed to this improvement in affordability. However, house prices nationally have changed little in the past year, which together with pressure on public sector earnings, has resulted in only a modest improvement in home affordability for key workers in the past 12 months.”
All five key worker occupations analysed – nurses, teachers, police officers, fire fighters and paramedics – have seen large improvements in affordability during the period. In 2007, Wishaw in Scotland was the only affordable town for nurses. However, there are now 113 towns (25 per cent) that are affordable for nurses.The most considerable gains have been for teachers (both primary and secondary) with an increase in affordable towns from six per cent in 2007 to 47 per cent in 2012, followed by police officers (15 per cent to 51 per cent) and paramedics (23 per cent to 56 per cent).
Over the past year, 32 towns have become more affordable for key workers, but 15 have become less affordable – resulting in a 4 per cent increase in the number of affordable towns overall. Peterborough, Lincoln, Morpeth, Glasgow, Clacton on Sea, Coventry and Wakefield are amongst those to become affordable over the last. Hinckley in Leicestershire, Newcastle upon Tyne, Dover and Beverley in East Yorkshire are among those that have become less affordable in the past year.
Wales is the most affordable region in the UK for key workers, with an average house price to key worker earnings ratio of 3.6 in 2012. The North (3.7), Yorkshire and the Humber (3.8) and the North West (3.8) follow closely behind. By comparison, in 2007, no region had a house price to earnings ratio below 5.0. Unsurprisingly, Greater London (7.6) and the South East (6.6) are still the
More than half (55 per cent) of towns were affordable in 2002 compared with 41 per cent in 2012. During this period, nurses have fared the worst, In 2002 just under a half (46 per cent) of towns were affordable to nurses compared to one in four (25 per cent) today. Fire fighters have seen the number of affordable towns drop by a third. There has been a 20 per cent reduction for police officers and 15 per cent for teachers.
