Four in five homes 'unaffordable to families'

Only 17% of properties with at least two bedrooms are affordable for families with an average income

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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.

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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.

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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%

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