house prices were once almost universally seen as good news - and
for two thirds of households the comfort of an appreciating asset
certainly made it feel that way. But attitudes are
shifting. Two out of three people now think it would be
better if house prices stayed the same or even fell. Many
owner-occupiers are now worried that their children will not be
able to buy or find suitable housing for rent given the shortage of
Research published by
Shelter this week shows that they are right to worry. In more
than half of areas in England, fewer than one in ten of suitable
homes for sale are affordable to a first-time buyer family with one
child with an average income. In London fewer than one in ten
homes would be affordable in all but one of the Boroughs.
Shelter's approach was to take a snapshot of the housing market
by looking at all the homes advertised for sale on Zoopla on 13
August this year. They then calculated what proportion of
them in each council area could be bought by three types of
first-time buyer, assuming a mortgage advance of 80% of the
purchase price based on annual income multiplied by 3.33 - based on
current lending practice.
The research looked at three types of household: a couple with
one child, with one adult in full-time and the other in part-time
work; a single adult in full-time work, and a couple without
children, both in full-time work. Each was assumed to be on
median earnings for 22-29 year-olds in their area.
Predictably, the results were best for two-earner couples with
no children. In most of the country they would qualify for a
mortgage on a fair proportion of the homes for sale - provided they
had managed to accumulate a 20% deposit from somewhere. But
not in London or the South East. In more than half of London
boroughs and over a quarter of South-Eastern districts fewer than
one in ten available properties would have been within their
For a couple with one child things were much worse. On the
assumption that they would need a property with at least two
bedrooms, they could afford fewer than one in ten of the homes
available in 55% of areas, including all but one of the London
boroughs and over 80% of the South East and South West. Only
in the North East was there no district where less than one in ten
homes were affordable.
But a single person seeking their first home faces the worst
situation of all. Needing no more than one bedroom is not
enough to compensate for having to rely on just one income.
Fewer than one in ten available properties are affordable to such a
buyer in 82% of areas, including all of London and more than 95% of
the South East and East regions.
Bear in mind that these are estimates for households on average
incomes - not the poorest by any means. This research
provides new and important evidence to bolster the case for action
by central and local government to ensure the provision of more