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Priced out of the housing market
THE cost of buying a home in Worcestershire has increased by more than three times the rate of an average salary over 10 years, leaving many people despairing of ever getting on the housing ladder.
National Housing Federation research found in 2001 the average price of a home in the county was £119,633, and the average salary was £14,529.
In 10 years the price of a home has rocketed to £206,137, an increase of 72 per cent. But wages have risen just 20 per cent to £17,436, making buying a home increasingly unaffordable.
Overall, Worcestershire has seen a 44 per cent increase in the gap between house prices and wages between 2001 and 2011.
Gemma Duggan, West Midlands lead manager for the National Housing Federation, said: “These shocking figures show that it is getting increasingly hard for thousands of people to buy a home of their own in the current climate.
“It’s no wonder that people can often feel like they have to win the lottery to be able to buy in their local area.
"A shortage of homes means the price to buy them is being pushed ever higher by the market, and out of reach of millions of hard working families.
"Unless we start building more homes people can truly afford, to match the demand, this will only get worse.”
Leaders at Worcester City Council are to continue to push to help first time buyers with a mortgage scheme which would help at least 40 couples, individuals or families.
Council leaders hope a scheme called ‘lend a hand’ where 20 per cent of the house’s value would be underwritten by the council in terms of an indemnity can help first time buyers.
Buyers would cash deposits of five per cent to get a mortgage instead of the 20 per cent to 25 per cent often demanded by lenders since the credit crunch began.
The money to back the scheme, if approved by full council, would come from £1 million left from the deal which brought the £60 million Hive to Worcester.
It would help about 40 people get on the housing ladder.
City council leader Simon Geraghty said it was a small council and there had to be a degree of realism about how many people they could help.
He said: “I think it will be a helping hand to get people on the property ladder. Forty people is better than nothing and it is a step in the right direction.”
He added many people in Worcester could afford a mortgage but not the deposit because of exceptionally stringent lending criteria.
He said: “There are people out there who are renting who don’t need to rent if we could support them to access the market. Because people can’t afford mortgages, that is building pressure in the rental market.”
The worst affected areas are Wyre Forest, where house prices are up by 72 per cent (from £99,980 to £172,085) while wages have increased by only five per cent, meaning the gap between house prices and wages has risen 63 per cent between 2001 and 2011, and Malvern Hills, where house prices are up by 72 per cent (from £141,075 to £242,416) while wages have increased by 15 per cent, meaning the gap between house prices and wages has risen 50 per cent between 2001 and 2011.