Housing crisis spreads from London to the South-west

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The full scale of Britain's housing crisis is revealed in stark terms today by a report showing that up to 90 per cent of young earners cannot afford even the cheapest homes in their area.

The full scale of Britain's housing crisis is revealed in stark terms today by a report showing that up to 90 per cent of young earners cannot afford even the cheapest homes in their area.

Problems getting on the property ladder are spreading out of London and the South-east to Dorset, Devon, Cornwall and the east of England, research by the Joseph Rowntree Foundation has found.

There are now 40 local authorities in England where at least four out of five people under 40 who are in work are unable to afford a home in even the lowest price bracket.

In some areas, such as Purbeck in Dorset, Portsmouth and Camden in north London, only 15 per cent of working households earn enough to put them on the bottom rung of the property ladder.

Property prices are rising beyond the reach of the average worker at a time when some building societies are prepared to offer mortgages of up to five times an individual's income.

The report is one of the first to look at the gap between average incomes and house prices. The average price for a four-bedroomed property in Purbeck, for example, is now £151,386 ­ five-and-a-half times the average local income.

While the gap is bigger in London boroughs such as Westminster, where the average property is 7.9 times more than the average income, analysts are concerned at how the housing problem is spreading out of the capital.

A home in east Dorset is now 5.4 times the average local income of £32,440, while in north Cornwall the rate is 5.1 times the £23,347 average salary of local people. Cambridge, Gloucester, Bournemouth and London boroughs such as Brent and Lambeth all have average property prices which are more than four times local incomes.

Professor Steve Wilcox, who compiled the report, said: "The analysis challenges any assumption that the housing crisis is confined to London and the South-east. When local incomes are part of the calculation, and we focus on the price of starter homes, it is clear that young working people in many districts face severe difficulties finding even a small home they can afford."

Professor Wilcox also analysed the ability of essential workers such as nurses, police officers and teachers to afford housing in the worst-affected areas. While London, the South-east and the South-west suffer from some of the worst shortages of nurses, they also have the biggest barriers to staff being able to buy property. A nurse in Islington earns just a third of the amount that he or she would need to afford to buy in the lowest bracket. In Portsmouth, a police officer on average income would need to double his or her earnings to afford a mortgage on the cheapest type of property available.

Lord Best, director of the Joseph Rowntree Foundation said: "If existing home owners living in these districts want local hospitals, care homes, schools and police stations to be properly staffed, they can no longer ignore the case for more housing. In the same way, families in these areas will recognise that children, once they become adults, may be forced to move away."

House prices rose by 1.3 per cent over the past month as the property market gained a new lease of life from the end of the conflict in Iraq, figures released yesterday by the property website Rightmove showed.

'We wanted more space but couldn't afford it in London'

Pproperty prices drove Robin Aitken from London to Bath – but he says the cost of homes in the South-west is now soaring beyond the reach of many.

Mr Aitken, finance director of a sports management company, moved with his wife and two children from Chiswick, west London, to a village just outside Bath two years ago.

He said: "We wanted to move for lifestyle reasons. I didn't want to bring up children in London, and we wanted more space but couldn't afford a bigger house in town. Our house in Chiswick was just an ordinary London terraced house. Down here we were able to buy an architect-designed, original home with an acre of land, for £100,000 less than our house in London had cost. If you transported our house and its garden to Chiswick, it would probably cost over £1m."

Mr Aitken, 39, says rising numbers are moving from London to the South-west – a migration that is causing house prices to rise.

"Our children go to the local school and more than half of their friends have moved out of London," he said. "The train services mean that I can commute to London for work but live in the country, and more and more people are doing the same as us now.

"You can see that it is causing house prices to increase – some places have doubled in value. Places like Bath are now expensive to buy in, and getting like London prices. It's OK if you are getting paid London-type salaries, but for people on smaller local salaries it must be hard."

The most expensive areas

Authority Average price of Average Price
4/5-bed house (£) income (£) ratio
1 Westminster 448,382 56,625 7.92
2 Camden 439,968 62,061 7.09
3 Islington 329,198 47,360 6.95
4 Kensington & Chelsea 617,433 98,553 6.26
5 Hackney 203,570 34,902 5.83
6 Purbeck, Dorset 151,386 27,154 5.58
7 Richmond upon Thames 303,997 54,716 5.56
8 Ealing 233,428 42,587 5.48
9 Haringey 207,884 38,153 5.45
10 East Dorset 176,639 32,440 5.45
11 Hillingdon 193,556 35,681 5.42
12 Harrow 205,974 38,437 5.36
13 Epsom & Ewell 203,895 38,177 5.34
14 Three Rivers, Herts 205,715 38,861 5.29
15 Tower Hamlets 233,415 44,260 5.27
16 Hounslow 207,868 39,512 5.26
17 Cotswold 166,013 31,641 5.25
18 Southwark 202,909 38,710 5.24
19 Hertsmere 191,924 36,796 5.22
20 Torbay 115,953 22,293 5.20
21 North Cornwall 120,835 23,347 5.18
22 Salisbury 152,723 29,612 5.16
23 Welwyn Hatfield 172,890 33,558 5.15
24 Lambeth 212,974 41,695 5.11
25 North Devon 117,723 23,082 5.10