Most of house market out of reach for key workers

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The Independent Online

Public-sector workers such as teachers and nurses have been priced out of the housing market in more than half of Britain's urban areas.

According to a survey, such workers cannot afford to buy an average-price house in more than 60 per cent of the country's 634 principal cities and towns, showing that the problem is no longer confined to the South-east and London.

The research for the Halifax, Britain's biggest mortgage lender, shows that house prices are rising faster than public- sector pay, with the average house price in 80 per cent of the towns analysed being in excess of £100,000. The system of topping up London salaries should be extended to the rest of the country, it recommended.

Comparing average salaries and house prices, the survey showed that 496 towns (78 per cent) are unaffordable for nurses. Police officers cannot afford to buy a house in 400 towns (63 per cent), while 390 (62 per cent) are now unaffordable for teachers.

The average price for a house in Britain in the last quarter of 2003 was £139,716, almost six times the average salary of nurses and firefighters. For teachers on an average salary of £30,274, the house price to earnings ratio was 4.61, and for police officers it was 4.44. .

According to the Office of National Statistics, the average salary for nurses is £24,000, while police officers earn £31,450 and firefighters £23,546.

Although the problem is still worst in south-east England, it now extends into the East and West Midlands, the West Country and East Anglia.

In London, the average price of a property stands at 8.8 times a nurse's average annual pay, compared with 8.21 times in 2002. For firefighters the ratio has risen from 8.03 to 8.77, and from 6.79 to 7.06 for teachers.

Despite a higher than average house price rise in the north of England the gap is still narrower. Scotland remains the best place for public-sector workers to buy houses.

Shane O'Riordain, Halifax's general manager, group economics, said: "Buying a home is out of reach for an increasing number of key workers across the country.

"Our research shows the average house price is now almost six times the average salary for both nurses and firefighters. In regions where affordability is an issue the recruitment and retention of public-sector workers will become more and more of a problem.

"Clearly it is sensible for the Government to continue with the London weighting but consideration should be given to extending the scope of the scheme outside the south of England."

The Government has launched a "starter homes" initiative to subsidise house purchases for public-sector workers in areas with high property prices, mainly the South-east. But Claire Cannings, money adviser at the Royal College of Nursing, pointed ouit that such an initiative did not help nurses in areas such as Stoke-on-Trent, were prices were rising at a faster rate than in the south.

She added: "In any case, such schemes only help nurses at the top end of the pay scale. Newly qualified nurses earning a maximum of £18,240 have not got a hope of getting a sufficient mortgage to buy a house in many areas. And it is forcing them to move away from areas where they are most needed.''

Chris Keates, deputy general secretary of the NASUWT teachers' union, said the problem was the same for her members, adding: "The union lobbies for key worker housing to be available to teachers in expensive areas in order to encourage teachers to live and work in areas with teacher shortages.''

She said mortgage and loan packages should be made available to make it possible for experienced teachers to continue working in inner-city schools.

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