London still expensive but teachers, nurses and firefighters can afford homes in more towns than they could in 2007
Housing has become more affordable for nurses, policemen and firefighters since property prices peaked in 2007, a report by the Halifax has revealed.
House prices in 38% of towns are now within reach of people earning the average key worker salary of £30,486 per year, up from just 3% of towns in 2007.
However there has been a decline in properties affordable to key workers during the past decade with just 38% falling into the right price bracket now compared to 64% in 2001.
The statistics are based on a ratio of average earnings collected by the Office for National Statistics (ONS) to house prices collected by the Halifax, although the average salary figures exclude workers in entry level or trainee roles.
Overall, employees in the five key worker groups – nurses, teachers, police officers, firefighters and paramedics have seen an increase in the number of towns where they could buy property since 2007. According to the Halifax firemen have benefitted the most: only 1% of towns were affordable for them in 2007 compared to 28% today. Nurses have also seen more property become affordable, climbing from 7% to 22% in the last four years.
Halifax say the current boost in affordability is due to a fall in house prices and an increase in earnings. However the increase may be short lived as the two-year pay freeze announced by the Chancellor George Osborne take effect during the next six months. The three year pay deals for 140,000 police officers and around 725,000 teachers in England and Wales will expire in September.
Nelson in Lancashire had the most affordable property with a house price to average key worker earnings ratio of 2.1, followed by Lochgelloy in Fife (2.4) and Bootle in Merseyside (2.5). But key workers continue to be priced out of many London boroughs including Chelsea (16.5), Westminster (13.6) and Camden (12.4).
The biggest improvement in affordability was in Wrexham, north Wales where the average house price to average key worker earnings ratio dropped from 6.2, to 3.7. There are now no affordable areas in London compared with two ten years ago – Barking and Dagenham.
The North topped the table as the most affordable region (3.7), closely followed by Yorkshire and the Humber, the north-west and Wales (both 3.8). Greater London (7.1) and the south-east are (6.7) the least affordable.
Nitesh Patel, housing economist at Halifax, said: “Over a longer period, the number of affordable towns in 2011 remains significantly lower than a decade ago. In 2001, two-thirds of towns were affordable compared to just a third today.”
