Key workers priced out of 'most' towns

70% of towns 'unaffordable' for public sector

Friday, 13, Apr 2007 12:00

The government has been forced to defend its record on key worker housing after new research revealed public sector workers are priced out of the majority of towns in the UK.

Key workers including nurses and teachers are priced out of seven in ten towns and local authorities in the UK, research by the Halifax found.

To be affordable, the bank calculated average local property prices could not exceed 4.46 times the average public sector wage – equivalent to the mortgage obtainable by most first-time buyers.

Affordability has declined markedly in the past five years, despite government efforts to help key workers onto the housing scheme. In 2002, just over a third of towns were unaffordable and access has declined by five per cent in the past year as 61 more towns became too expensive for public sector workers.

Housing Minister Yvette Cooper countered that nearly 25,000 key workers have purchased property since 1997 through government shared equity and shared ownership schemes.

"This means people have stayed in crucial frontline jobs - six out of 10 key workers say our schemes have helped them continue in their chosen professions," she explained.

"No Government has done more to help key workers," Ms Cooper continued. "But to tackle affordability in the long run we need to build more homes across the board - and unfortunately there is still strong opposition to increasing housing in many areas."

Halifax surveyed 517 towns and local authorities and found average properties were too expensive in 363.

Unsurprisingly, London and the south-east of England are the least affordable areas, with 100 per cent of London boroughs being too expensive for public sector workers. More than half of affordable towns are in Scotland, while Wales and the north of England were also more accessible.

Tim Crawford, group economist at Halifax, said: "Housing affordability continues to deteriorate for key workers across Great Britain and it is now clearly not a problem confined to the south of England.

"The government's key worker schemes are providing some relief but given recent trends there would clearly be benefits from broadening their reach."

Affordability has declined as UK house prices have doubled in the last five years. In recent years public sector wages have increased ahead of inflation, but considerably below the rate of house price growth.

Unions have been alarmed at the chancellor Gordon Brown's intention to cap public sector pay deals below inflation.

This is effectively asking them to take a pay cut, explained Unison's head of health Karen Jennings, and "bad news" for key workers trying to get on the housing ladder.

Halifax's report is "not surprising," continued Ms Jennings. Although the key worker housing scheme is "welcome", she argued that it is too complicated and too many people do not qualify.

The government needs to build more affordable rental accommodation, the public sector union argues. The emphasis should not only be on helping people onto the property ladder but enabling all public sector workers to live in affordable accommodation close to their job.