Call for ‘apolitical’ approach to housing shortage

THE minimum wage a first time buyer would need to buy a home in the North West is now more than £26,000 when the actual average annual wage is about £20,500.

This is according to research from KPMG which underlines the divergence between house prices and earnings.

The figures are based on a 10% deposit and borrowing the remaining 90% at a loan to income ratio of 4.5.

While the North as a whole has a far closer gap between actual and required annual wage than the South, there is still an environment where only those earning over the average, or those inheriting money, can afford to buy.

But it is not just home ownership that is the issue – the KPMG-commissioned poll has revealed that some 66.7% of people feel there is not enough housing in the UK that is affordable, with more than a quarter of those surveyed (28.1%) worried about how they will afford, or continue to afford, their own home or pay their rent.
 
Such figures are in stark contrast to the aspirations of people across the North West – the poll showed that we it is still a region of wannabe homeowners, with 70.6% of people in the North West saying they’d prefer to buy than rent.
 
A potential reason for this desire to buy is revealed by the 58% of people who agree that owning property helps save for retirement showing that, for many, investing in a home has become a de facto pension pot.
 
Of those not already on the property ladder in the North West, 46.5% would like to buy within the next 10 years.
 
Some 44.8% are concerned about the next generation, agreeing that more must be done to help young people onto the housing ladder; 63.5% believe that more houses should be built.
 
This jarring between aspiration, fears and reality is yet another example of the need to find a long-term solution to the current housing crisis, says KPMG.
 
Jon Holt, senior partner at KPMG’s Manchester office, said: “These figures make for concerning reading and show that housing affordability in the region is no longer just a problem for lower wage earners. Now, unless you have an above average income or receive an inheritance, it is unlikely you will be afford to buy in the North West.
 
“And yet this isn’t just about home ownership, because our findings show genuine concern over wider affordability of housing, whether buying or renting.
 
“Last year we worked with Shelter to publish a blueprint for the next Government to tackle the housing crisis once and for all.

“That report looked in-depth and cross-tenure, and these latest figures are a sure indication that more needs to be done.

“Politicians need to develop an apolitical, long-term housing strategy, engaging both public and private sectors, to get the UK building and stabilise our housing market.

“Reforms must be wide-spread: further unlocking public sector land banks, boosting small and self-builders, giving power to towns and cities to build the homes they need, and increasing investment in affordable homes are some of the ways government can match businesses’ commitment to achieve this.
 
“With the election a few days away, we again call on the next government to act decisively on housing so that people’s basic housing needs and their longer-term aspirations can be met, whatever they might be.”