Can anyone afford to be a homeowner these days?
BBC News has recently highlighted skyrocketing house prices and a collapse in the affordability of housing in many parts of the UK.
In Oxford — the focus of the news item — prices have now reached 16 times average incomes. It is estimated that to buy an average priced house in Oxford you need an income of £70,000, and a deposit of £40,000. Rent levels in the private sector are also prohibitive for those on low incomes; leading more and more families to rely on Housing Benefit to live in the city.
This puts modest houses or flats to buy or rent well out of reach of key workers such as teachers, nurses, police, science lab staff, fire fighters, care workers, and the council staff the city needs for its economy and delivery of public services. Key workers are forced to travel in from far out of the city at great cost to themselves, or have to cram into smaller units, or live with relatives for many years. Even saving up for a deposit to live in the city, in this situation, is futile. Oxford Bus Company says it is considering building housing for its own workers to retain and attract staff.
Research at the Collaborative Centre for the Built Environment (CCBE) at the University of Northampton into housing shortages in the East Midlands, suggests that major house builders, even with significant subsidies, are unable to build enough affordable homes or to build enough to bring down prices of homes for sale.
To meet the scale of demand and need, there are three possible ways forward. First, local councils, housing associations or co-operatives should be given the funding and powers to build affordable new housing for key workers and those on low and average incomes. Secondly, local businesses, colleges and the NHS should be encouraged to build key worker housing for their own workers. Thirdly, where councils like Oxford are locked out of new areas to build housing in surrounding districts, they should be given powers as part of the drive to localism, to acquire designated housing sites in these districts so they can speed up house building.
Bob Colenutt — Senior Lecturer, Social Sciences — Institute of Urban Affairs