Four in five homes 'unaffordable to families'

House prices

Fewer than one in five homes for sale in England suitable for a typical working family trying to get on the property ladder would be affordable for them, research by Shelter suggests.

The housing charity analysed the asking prices on hundreds of thousands of properties listed for sale and compared them with the mortgage that it calculated an average family buying their first home in early 2015 would be able to afford.

The research, which looked at homes listed for sale on a property website, suggested that only around 17% of properties on the market with at least two bedrooms are affordable for families with an average income of £30,748.

Shelter said the problem was most severe in London, where its research identified just 43 "affordable" homes on the market for families.

Search for a cheaper mortgage

This represented just 0.1% of the potentially suitable homes advertised in London. Shelter said that number would have been lower if it had not included houseboats and a mobile home in its study.

Regionally, the North East has the most affordable market for families, Shelter said, with 42% of the homes advertised that were suitable also being affordable.

There were 35 local authority areas mainly concentrated around London and the South East where Shelter found no affordable suitable homes with at least two bedrooms for sale for families on average incomes.

These areas were Brentwood, Broxbourne, Cambridge, Chelmsford, Epping Forest, Harlow, St Albans, Stevenage, Three Rivers, Uttlesford, Watford, Welwyn Hatfield, Camden, Croydon, Enfield, Hammersmith and Fulham, Haringey, Harrow, Islington, Kensington and Chelsea, Kingston upon Thames, Lambeth, Merton, Southwark, Sutton, Westminster, Elmbridge, Epsom and Ewell, Gravesham, South Buckinghamshire, Spelthorne, Tandridge, Tonbridge and Malling, Waverley and Windsor and Maidenhead.

Search for a cheaper mortgage

Shelter also calculated that a first-time buyer who is single and typically earning £21,851 would only be able to afford around 7.5% of homes advertised for sale.

Family and dog relaxing on sofa

For single people looking to buy something bigger with two or more bedrooms, only around 5.7% of homes would have been affordable.

Couples with no children and an average income of £43,446 fared better, with 32.3% of the market priced affordably for them, Shelter said.

Shelter acknowledged the price a property eventually sells for can be lower, or in some cases higher, than the price it was advertised for.

But it said the "very low" proportions of listings which its analysis deemed to be affordable underlines the stark choices faced by the average first-time buyer.

The charity highlighted the case of a married mother-of-three from Colchester named Fiona, who said: "I've always wanted a stable home for my family, but despite my husband and I both working in decent, professional jobs, house prices are way too high for us to even dream of being able to afford a home of our own.

"We need somewhere stable to raise our children, but even with a few pay rises over the years and a bit of money put aside, it seems like we'll never get there.

"I feel completely resigned to never getting on the property ladder. A place to call home should be something you can work towards, not a luxury you can never attain. It just makes us feel utterly helpless."

Shelter based its research on asking prices for homes listed on website Zoopla, although the charity said the research was in no way endorsed by Zoopla.

Properties which were listed as having no bedrooms, shared ownership properties and properties referencing retirement were removed from the pool.

The research assumed that an average first-time buying family would be a couple aged in their 20s with one or more children, and might bring in one full-time and one part-time average income. The Annual Survey of Hours and Earnings was used for these calculations.

Shelter said an "affordability threshold" was calculated by working out how much an average first-time buying family could borrow, based on data published by the Council of Mortgage Lenders.

This threshold represents the highest price the household would be able to pay towards a property, assuming that they have the average deposit of 17%.

Figures from the English Housing Survey released in February showed home ownership in England has fallen to its lowest level in 29 years, with 63% of households now classed as owner-occupiers. In 2013/14, 19% of households in England were renting privately, up from 18% a year earlier.

Campbell Robb, chief executive of Shelter, said: "For the next government, whoever that may be, it's time for the talk to stop and the work to begin. Politicians need to act swiftly to deliver the plan that will build the 250,000 homes a year we need."

Here are the percentages of homes with at least two bedrooms on the market that would be affordable for families in each region, according to Shelter:
  • England, 16.9%
  • North East, 42.2%
  • North West, 32.4%
  • Yorkshire and the Humber, 31.6%
  • East Midlands, 19.4%
  • West Midlands, 21.5%
  • East, 7.5%
  • London, 0.1%
  • South East, 3.9%
  • South West, 6.0%
2014 property: sluggish cities
See Gallery
Four in five homes 'unaffordable to families'

Average price £202,649

Perth and Kinross has seen some volatility over the years: three years ago prices were more than 10% lower than today. Just over a year ago the recovery kicked in, so that 12 months ago they were just 3.58% shy of where they are now. Since then rises have been far slower and more gradual. The good news is that they haven’t dropped back, so there’s every hope that the recovery is sustainable.

Prices remain affordable, so that for a typical price of £200,000, buyers can get this four bedroom family home in a quiet cul-de-sac two miles from the centre of Perth.

Average price £168,769

House prices in Wolverhampton have been sluggish for years, so this growth actually represents a small recovery for the city. Prices are up 3.39% over the year, although before anyone gets too excited, it's worth highlighting that the lion's share of this was in the first half, and prices have stagnated this winter. It may be too soon to call the recovery.

It means that for your average budget of £170,000 you can buy this three-bedroom semi-detached property.

Average price £176,427

House price movements haven’t been dramatic in Lancaster in recent years: they have just crept up at a glacial pace. This year is no exception, as they posted growth of 2.8%.

Houses are affordable in Lancaster, so for the typical price of £180,000 you can get this beautiful 3-bedroom terraced home in great condition, around a mile from the centre.

Average price £160,239

House prices here are far lower than the average for the UK, and have not risen much since the onset of the recession. In the past five years prices are up just 5.65%.

Things looked very positive in the first half of this year, with price rises faster than most sellers could remember, but have since fallen marginally.

It means there are plenty of bargains around the typical price of £165,000, including this three bedroom semi-detached house within a mile of the city centre.

Average price £120,351

House prices have been sluggish in Bradford for years - returning less than 4% over the past five years. This year has seen more promising growth - particularly around the middle of the year, but prices remain up just over 2.3% in the year.

Prices are lower than the UK average, so there is some choice around the typical price of £120,000, including this four bedroom terrace house in Shipley.

Average price £136,075

Prices in Sunderland have been rising very slowly since the onset of the financial crisis - returning just under 7% in the past five years. This year, rises were stronger in the first six months, before stagnating in the second half. In the past three months house prices have risen just 0.15%.

Prices are well below the UK average, so there are some beautiful affordable homes for sale. This includes a 2-bedroom semi-detached property two miles from the centre for under £140,000.

Average price £231,433

Chester may be a beautiful city, but the property market has been less attractive over recent months. After huge rises last year, it turned at the beginning of this year - and only posted a 1.85% return over the past 12 months.

However, this is not a sign of further decline, because since then we have seen it fluctuate, and prices are currently almost 1% up in just three months.

Among the properties on offer in the £235,000 region is this three bedroom semi-detached house two miles from the city centre.

Average price £152,180

The housing maket in Newport has been tough during the downturn. Over the past five years, prices have risen just over 7%. However, after a flurry at the beginning of this year, they have been falling ever since - and prices are actually down almost 3% in the past six months.

It means it’s a buyer’s market, so for the average property price there are plenty of decent homes available, including this beautiful Victorian 4-bedroom terraced house.

Average price £119,233

Hull has been a buyer’s market since the financial crisis began in 2008. In the past five years, growth has been less than 5%, so this year’s disappointing returns have followed the same trend. House prices are actually marginally down in the last six months.

Prices remain highly affordable, so there is some lovely property available for the average price, including this lovely period end-of-terrace in the catchment area of a number of good schools.

Average price £154,566

Durham’s property market has struggled since the onset of the financial crisis, and over the past five years prices have grown by just 3.6%. This year house prices have barely moved since the spring.

Prices remain well below the UK average, so for a typical price of £153, 950, buyers can snap up a well-presented three-bedroom semi-detached home two miles from the city centre.


Property on AOL Money

Italian castle once used by Nazis on sale for £5m

Take a look around some of London's compact homes

See inside Al Capone's former Miami villa

What They're Not Telling You About Housing
Read Full Story