LONDON: Many key workers in the public sector in the U.K. are not able to have homes in seven out of 10 towns in the country, a study by Halifax indicated.
The average house price was unaffordable for all five key worker occupations -- nurses, fire service personnel, police officers, teachers and ambulance staff -- in 70 per cent of the towns across the country in March, up from 65 per cent of towns last year, the study showed. In March 2002, the price in just 36 per cent of towns was unaffordable.
The study found that nurses faced the hardest struggle to own a home with typical house price in 99 per cent of towns out of reach for this category of workers, who earn an average salary of 25,724 pounds.
Halifax calculated the affordability by examining the salary levels of the key workers and the average prices of houses in 517 towns around the country. It classified towns as unaffordable where the house price:earnings ratio remained greater than that faced by the average first-time buyer, who currently pays 4.46 times their salary for a home.
By region, affordability is worst in London and the South West, Halifax said, with average house unaffordable to all the key worker groups in all 32 London boroughs and all 34 towns in the South West. In comparison, the average house was unaffordable for all the key worker groups in 38 per cent of towns in the South West and in 94 per cent of London boroughs.
The study showed that the greatest relative deterioration in affordability in the past five years has been in Truro in the South West, which moved from being affordable for some key worker groups in March 2002 to unaffordable for all key workers in March 2007. Its house price to earnings ratio rose by 5.0 times to 9.4 times. In second place is Buxton in the East Midlands (a 3.2 times increase) followed by Matlock in the East Midlands (a 3.0 times increase).
In Halifax's estimates, Gerrards Cross in Buckinghamshire is the least affordable place for key workers in the country with a house price:earnings ratio of 20.8. The next least affordable area is Kensington & Chelsea (18.6 times PE ratio), followed by Weybridge in Surrey (14.9 times PE ratio).
Halifax said there are 20 towns where homes cost more than 10 times the average salary for all key workers. Five of these are in Surrey, a county in which all towns are out of reach for the key workers.
The bank said Lochgelly in Fife in Scotland is the most affordable town with a price earnings ratio of at most 4.1 times for key workers. Scotland also accounts for five of the ten most affordable towns for key workers. The most affordable town in England is Nelson in the North West with a house price to earnings ratio of 4.5 times
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The study said flats and maisonettes are unaffordable for all key worker groups in only 30 per cent of towns across the country.
Tim Crawford, Halifax's group economist says nurses face the most difficulties in getting on to the housing ladder. But all key worker groups are likely to struggle to purchase a house apart from in Scotland.
The government has launched a scheme in October 2006 to help key workers by offering interest-free loans through mortgage lenders that reduce the borrowed amount to 75 per cent of a property's price. The scheme is expected to get homes for 20,000 people in its first five years. However, response from lenders has not been encouraging with only four lenders signing for the scheme and a couple of hundreds of borrowers opting for it.
According to the study, the five least affordable places for the key worker groups are: Gerrards Cross, south east, Kensington & Chelsea, London, Weybridge, south east, Sevenoaks, south east and Westminster, London.
The five most affordable places are: Lochgelly, Scotland, Bellshill, Scotland, Clydebank, Scotland, Wishaw, Scotland and Merthyr Tydfil, Wales.
