Local people need 43% pay rise to afford a home in the North East | believe housing

Local people need 43% pay rise to afford a home in the North East

3 February 2017 - Latest news

The average worker in the North East now needs a pay rise of over 40% just to afford a standard mortgage on a typical home in the region, a new report from the National Housing Federation reveals today.

According to the North East Homes Truths 2016/17 report, those earning any less than £35,015 a year are now officially priced out of buying the average home in the area.

Despite house prices in the North East being considerably lower than the national average, the combination of low wages and the highest unemployment rate in the country is resulting in an acute housing crisis in the region.

Indeed, local salaries remain disproportionate to house prices, meaning the average North East home – costing £153,189 – is now over six times the average yearly income of £24,409.

Home ownership is furthest out of reach in Northumberland and Newcastle-upon-Tyne, where average houses cost around 7.5 times local salaries. In Middlesbrough, earnings are lowest across the whole region and one in 10 people are unemployed.

The report also exposes the great number of empty homes in the region. Of these 16,000 homes, many are congregated in pockets of deprivation needing sweeping investment and regeneration.

Home Truths 2016/17 reveals the most and least expensive places to buy a home in the region:

Area Mean house price   Mean salary How many times house prices are average salaries
Northumberland £186,225 £24,929 7.5
Newcastle upon Tyne £185,879 £25,173 7.4
North Tyneside £172,103 £24,414 7.0
Tyne and Wear £159,200 £24,393 6.5
Stockton-on-Tees £155,003 £24,419 6.3

 

Five least expensive areas to buy in the North East

Area Mean house price Mean salary How many times house prices are average salaries
County Durham £127,917 £24,747 5.2
Sunderland £133,651 £23,904 5.6
Hartlepool £133,730 £24,664 5.4
Redcar and Cleveland £135,920 £22,932 5.9
Gateshead £143,310 £24,014 6.0

 

In total, housing associations built more than 40,000 homes across the country in 2015/16 – 29% of all new homes in England. Housing associations have ambitions to work with Government to build thousands more new homes across the country. 

Monica Burns, the National Housing Federation’s External Affairs Manager for the North East, said:

“It is clear that the North East is suffering from an acute housing crisis and these truly distressing stats simply reaffirm that fact – we simply must get building more genuinely affordable homes.

“Our sector is buoyed by the additional funding and flexibility secured in the Autumn Statement and we are now seen as key players in ending the housing crisis within a generation.

“Local housing associations are already stepping up to address the dearth of affordable housing in the area, last year completing or starting work on nearly 2,000 homes.

“But this is just the beginning and fixing the local housing crisis goes beyond just ramping up supply. Regeneration, enhancing infrastructure and bringing empty homes back into use should also be vital priorities for the North East.”

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