Key public sector workers priced out of housing market

New research from Halifax highlights the continued deterioration in housing affordability for key workers. The average house price was unaffordable for all five key worker occupations in 70% (363 out of 517) of towns across Great Britain in March 2007, up from 65% (338) of towns last year. Five years ago in March 2002, the average house price in only 36% (185) of towns was unaffordable for all key workers.

Nurses and firefighters face greatest affordability problems

The average house price in 99% of towns (510) was unaffordable for the typical nurse in March 2007, while 97% (504) of towns were unaffordable for firefighters. Five years ago the average house price was unaffordable in only 55% (282) of towns for firefighters and 58% (302) of towns for nurses.

Affordability problems greatest in London and the South West

By region affordability for key workers is worst in London and the South West with the average house unaffordable for key workers in all 32 London boroughs surveyed and all 34 towns surveyed in the South West. In 2002, the average house was unaffordable for all key worker occupations in 38% (13) of towns in the South West and in 94% (30) of London boroughs.

Truro and Buxton see largest deterioration in key worker affordability

The greatest relative deterioration in key worker affordability in the past five years has been in Truro in the South West. Truro moved from being affordable for some key worker groups in March 2002 to unaffordable for all key workers in March 2007, while its house price to earnings ratio rose by 5.0 times to 9.4 times. The next largest deterioration was in Buxton in the East Midlands (a 3.2 times increase) and Matlock in the East Midlands (a 3.0 times increase).

Surrey is the least affordable county for key workers

Gerrards Cross in Buckinghamshire is the least affordable place for key workers to buy in Great Britain with a house price to earnings ratio of at least 20.8 times for a key worker. The next least affordable area for key workers is Kensington & Chelsea (18.6 PE ratio), followed by Weybridge in Surrey (14.9 times PE ratio). There are 20 towns where the average house price is more than 10 times the average earnings of key workers. Five towns in Surrey have a house price to earnings ratio for key workers of at least 10 times, while all towns in the county are unaffordable - making it the least affordable county for key workers in Great Britain.

Lochgelly is the most affordable town for key workers in Great Britain

Lochgelly in Fife is the most affordable town in Great Britain for key workers with a price earnings ratio of at most 4.1 times for key workers. Five of the ten most affordable towns for key workers are in Scotland. The most affordable town in England is Nelson in the North West with a house price to earnings ratio of 4.5 times for key workers.

Flats are more affordable for key workers. Flats & maisonettes are unaffordable for all key worker groups in only 30% of towns (117 out of 391) across Great Britain at Q1 2007. However, the proportion has risen over the past five years with flats unaffordable for key workers in 11% of towns in Q1 2002.

Tim Crawford, Group Economist at Halifax, commented: “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. Nurses face the most difficulties climbing onto the housing ladder but all key worker occupations are likely to struggle to purchase a house apart from in Scotland.

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