Public Workers Can't Afford To Buy a House (UK)

Property woe for public workers

Public sector workers such as teachers, nurses, police and firefighters cannot afford to buy homes in seven out of 10 UK towns, the Halifax bank has said.
Halifax arrived at its conclusions by dividing average regional property prices by average annual wages.

It said property was most unaffordable in London and South-East England but property costs were also racing away from wages in other parts of the UK.

The government said it had worked hard to help key workers buy homes.

Housing Minister Yvette Cooper said: "No government has done more to help key workers; since 1997 almost 25,000 key workers have got their first step on the property ladder through government shared equity and shared ownership schemes."

Of 517 towns and local authorities surveyed by the bank, 363 (70%) were deemed unaffordable.

The idea that they (health workers) can get on the property ladder is a non-starter for many

Halifax defined a town as unaffordable if the average price of a house was more than 4.46 times the average wage of the workers - it is also the average multiple of income a first-time buyer pays for a property.

While most unaffordable towns were in London and the South East, Scotland, the north of England and Wales were the parts of the UK with the most affordable towns.

But, even in those areas there are many towns where property is unaffordable.

House inflation

In 2002, just over a third of towns were beyond the means of public sector workers looking to buy property, last year that figure rose to 65%.

FIVE LEAST AFFORDABLE PLACES
Gerrards Cross, south east
Kensington & Chelsea, London
Weybridge, south east
Sevenoaks, south east
Westminster, London
Source: Halifax

This reflects a rapid rise in UK house prices, which have doubled in the last five years.

At the same time, wages across the economy have been increasing ahead of inflation but not keeping pace with house price growth.

In the past year, according to both the Nationwide and Halifax, average UK house prices have risen by about 10%.

Unions claim prospects for public sector workers may worsen in the near future as the government aims to limit wage increases to below the rate of inflation.

FIVE MOST AFFORDABLE PLACES
Lochgelly, Scotland
Bellshill, Scotland
Clydebank, Scotland
Wishaw, Scotland
Merthyr Tydfil, Wales
Source: Halifax
"Health workers are effectively being given a pay cut and the idea that they can get on the property ladder is a non-starter for many," Anne Mitchell, spokeswoman for the Unison trade union said.

"There is a real shortage of accommodation, both to rent and to buy, as hospital trusts have sold off a lot of on-site nurses' accommodation."

However, public sector workers do enjoy some advantages over many private sector workers.

They are often given preferential treatment by housing associations and have access to government sponsored shared-ownership schemes.

Growing resentment

Helen Adams, chief executive of self-help website, first-time buyer.com, has noted a growing resentment on the site's chatroom against public sector workers.

READ THE FINDINGS

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"Many of my site users have a bit of a beef with public sector workers. They see them going to the front of the line in new developments and given a financial leg-up which is not available to them," Ms Adams said.

"They recognise that they do a necessary job but feel left out... they would like something to be done for them too," she added.

But Ms Mitchell said that the advantages open to public sector workers were overplayed.

"These shared ownership schemes are complex and you still have to find a large mortgage. The average nurse starts on £19,000 and has course debts of £5,500. Nurses are not able to move to expensive parts of the country," Ms Mitchell said.

She added that other workers in the health care sector, such as hospital porters and cleaners, are in a worse position as they earn less than nurses and are often unable to take advantage of shared ownership schemes.



% UNAFFORDABLE HOMES FOR KEY WORKERS BY REGION
(Proportion of towns in which average home too expensive)
All key workers Fire service Police Teachers Nurses Ambulance staff
North 34% 93% 33% 37% 100% 63%
Yorks 44% 98% 58% 58% 100% 44%
North West 45% 96% 53% 58% 98% 45%
East Midlands 82% 97% 82% 84% 100% 84%
West Midlands 71% 98% 73% 78% 100% 85%
East Anglia 89% 100% 89% 100% 100% 89%
South West 100% 100% 100% 100% 100% 100%
South East 98% 100% 98% 99% 100% 100%
Greater London 100% 100% 100% 100% 100% 100%
Wales 24% 95% 24% 52% 95% 71%
Scotland 15% 90% 15% 46% 90% 50%
Great Britain 70% 97% 72% 78% 99% 79%
Source: Halifax


Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/6544577.stm

Published: 2007/04/12 23:04:04 GMT

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