The housing shortage in the North West is pushing house prices and private rents out of reach for local workers, according to a new report from the National Housing Federation – with the crisis set to get even worse by 2020.
Home Truths 2013/14: North West reveals:
- Less than two thirds (64%) of the number of new homes needed in the North West are currently being built
- Private rental costs across the North West are predicted to rise 39% by 2021
- The average home here costs nearly eight times the average income
- A gross annual income of £35,607 is needed for the average mortgage in the North West.
It warns that while workers in the region have seen the average wage rise by just 23% between 2002 and 2012, house prices have rocketed more than three times as fast – by a staggering 76%.
The report blames the North West’s affordability crisis on the housing shortage in the region, with less than two thirds (64%) of the homes the region needs being built. Each year, 17,500 new households are expected to form in the North West but in 2012/13 just 11,160 homes were built, nearly 3,000 of which by housing associations.
The average salary in the North West is only £19,656, but the average house price increased to £155,781, eight times the average salary. That rises significantly in parts of the region, hitting over 11 times the average salary in rural areas like South Lakeland and Eden and over 10 times in Trafford and Cheshire East.
Private rents have increased by 18% and 12% in Manchester and Lancaster respectively over the past four years. On top of this, rents across the region are expected to rise a further 33% by 2020.
The report reveals the top ten local authorities in the North West with the highest house price to income ratio as well the extent of increases in house prices and private rents.
With house prices and rents rising so rapidly, Home Truths 2013/14: North West also warns that rising housing costs are forcing more people to rely on Government help to stay in their homes. With the Government currently spending more than £23bn a year on housing benefit, in the North West there has been a 112% increase in working people claiming housing benefit between 2009 and 2013, the highest regional increase. Much of this goes into the pockets of private landlords, when that money could be put towards building new affordable homes.
Katie Teasdale, North West External Affairs Manager for the National Housing Federation, says: “High house prices, rising rents and stagnant wages in the North West are not only making life extremely difficult for people living and working in the region, but they are also affecting employers and businesses and risk holding back economic growth. Workers in the region are becoming a generation of renters, unable to get on the housing ladder and faced with continually rising rents.
“With more support, housing associations across the North West can be real catalysts for change for local communities. They are in it for the long term and can actively drive forward a balanced economic recovery.”