North West districts ‘among the most affordable for young homebuyers’
Young earners in the North West find it easier to set foot on the home ownership ladder than in most other parts of England. Access to ownership varies across the region, but there are no districts where it is harder than the average for England as a whole, according to league tables released by the Joseph Rowntree Foundation.
By comparing average local incomes for earners in their 20s and 30s with the typical prices of a less expensive starter home, the analysis shows that around 25 per cent of young working households across the region would have difficulty affording a modest starter home. This compares with almost 50 per cent nationally.
The ‘access to ownership’ league for the North West ranges between Wyre where 45 per cent of working households under 40 would be unable to purchase less expensive 'two‑up, two-down' homes in the district, to Pendle where only 12 per cent experience the same problem. In Manchester and Liverpool, starter home prices are beyond the reach of fewer than one in four young working households, compared with more than three out of four across inner London.
The new study also shows that, unlike the south of England, starter home prices in most North Western districts are low enough to be affordable by key workers. For example, in Pendle, a qualified nurse, teacher, police officer or social worker with 3 years’ experience, would find the bottom 25 per cent of the price range for modest 4- and 5‑room homes well within their reach.
Chester, Ellesmere Port & Neston, Macclesfield, South Lakeland, Stockport, Trafford, Fylde, Ribble Valley, West Lancashire, and Wyre are the only districts where where a single nurse's income is less than 100 per cent of the estimated level needed to start buying with a mortgage. But even in these areas a qualified teacher with 3 years’ experience should be able to afford a mortgage on a less expensive starter home.
The report, by Prof. Steve Wilcox of the University of York, presents three different ‘affordability’ indices comparing younger workers’ earnings with house prices for 4- and 5-room homes in every English borough and district. They cover:
The resulting league tables show that:
- House price to local income ratios for North West districts were all below the average of 3.37 for England, with the exception of South Lakeland where it was very slightly higher. Districts with the highest ratios were: South Lakeland, Barrow-in-Furness, Wyre, West Lancashire, Blackpool and Ellesmere Port & Neston. The lowest ratios were in: Copeland, Fylde, Pendle, Bury and South Ribble.
- The access to ownership index showed that the region’s five most accessible districts for workers under 40 on average local pay rates to start climbing the housing ladder were: Pendle, Blackburn, Copeland, Hyndburn and Bury. The five least accessible districts were: Wyre, South Lakeland, Eden, Macclesfield and Trafford.
- The five most affordable areas for key workers were: Pendle, Barrow-in-Furness, Hyndburn, Blackburn and Copeland. The least affordable districts for key workers (especially social workers and nurses) were Macclesfield, Trafford, South Lakeland, Wyre, Fylde and West Lancashire. For instance, a qualified nurse with 3 or 4 years’ experience in Macclesfield would have 81 per cent of the estimated annual income needed to start buying a less expensive starter home in the district. However, this compares with parts of London, the South, and Eastern Region where even two key worker incomes would not be enough to buy a modest house or flat.
Prof. Wilcox said: "Starter homes in the North West are generally much more affordable than those in London and the South East, yet there are still five districts where a third or more of young working households cannot afford their first step into home ownership. House prices are much lower than in the South of England, but the ‘affordability’ gap tends to narrow once differences in the level of local pay and incomes are taken into account. For example, house prices in Barrow-in-Furness are relatively low, but income levels for young earners are proportionately even lower compared with other districts."
He added: "The position of key workers, such as nurses, teachers and police, is rather different because their pay rates are largely determined at national level. The good news in most North Western districts is that their individual incomes are adequate or very close to the level needed to raise a mortgage on a modest starter home."
