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With average house prices now eight times the average wage, affordable housing remains a dream

28 September 2017

1:01 PM

28 September 2017

1:01 PM

Housing – and specifically the dearth of reasonably priced housing – is an issue that crops up again and again in the political conversation. Young people are being priced out of the housing market; even where new housing is being built, very little of it could be classed as ‘affordable’.

So today’s news that the average house price is now eight times the average wage will, probably come as little surprise. House prices have been increasing exponentially over the last few decades; in 2000, the average house was 3.96 times the average income, and even since 2007 the average house price has increased by 19%. The fact that it isn’t a surprise doesn’t mean that it isn’t something we should be concerned about, however.

A few weeks ago, Ed West that Tories need houses, rather than memes, to attract younger voters. This is very true; but the problem goes deeper than party politics. If we don’t build new housing, the demand – and therefore cost – of the housing that does exist will only increase, making the problem ever worse. No wonder that the local government authority (LGA) is calling for an urgent investment in house building by councils. Their demands include that councils be allowed to borrow money in order to build more housing, as well as being able to keep all of the proceeds of Right to Buy sales (at the moment, councils are only allowed to keep one third of receipts from homes sold through the scheme).

As Cllr Martin Tett of the LGA explained:

‘Councils are doing all they can to encourage housebuilding, by approving nine in 10 planning applications, but the fact is we’re hamstrung by restrictions on our ability to borrow to build. These must be lifted, so we can invest in the new homes our communities need.’

While the LGA’s suggestions might go some way towards tackling the housing crisis they aren’t, of course, the only solution to the problem. It also isn’t the first time they have made these suggestions in their submission to the Budget. But as the gap between earnings and house prices continues to widen, the lack of affordable housing in the UK is a problem that desperately needs tackling.

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