The Halifax Key Worker Housing Review for the period to March 2012 shows that two in five towns (41%) are now affordable for the average key worker, based on the ratio of average house prices to average earnings.
In September 2007 homes in just 3% of UK towns - 12 towns in total - were affordable for key public sector workers, demonstrating a significant improvement since 2007.
The Halifax Key Worker Housing Review tracks housing affordability for five groups of public sector workers: nurses, teachers, police officers, fire fighters and paramedics in 450 post towns (including 32 London boroughs) across the UK.
Housing affordability is defined as the ratio of average house price to regional average earnings of key workers; where the ratio is below 4.0 housing is deemed affordable, above 4.0 is unaffordable. The calculation is based on a single income and is therefore conservative according to the Halifax.
Martin Ellis, housing economist at Halifax, said: "Housing affordability for key public sectors workers has improved significantly across the UK since house prices peaked in 2007.
“More than four in ten towns are now affordable compared with just 3% in 2007. The greatest concentration of this improvement has been in northern England, Wales and Scotland.
“There are still considerable affordability issues for key workers in London and the South East.”
Ellis said a combination of house price declines and growth in earnings has contributed to this improvement in affordability although the past year has had little impact on the improvement.
All five key worker occupations analysed have seen large improvements in affordability during the period.
In 2007, Wishaw in Scotland was the only affordable town for nurses. However, there are now 113 towns (25%) that are affordable for nurses.
The most considerable gains have been for teachers (both primary and secondary) with an increase in affordable towns from 6% in 2007 to 47% in 2012, followed by police officers (15% to 51%) and paramedics (23% to 56%).
Over the past year, 32 towns have become more affordable for key workers, but 15 have become less affordable - resulting in a 4% increase in the number of affordable towns overall.
Peterborough, Lincoln, Morpeth, Glasgow, Clacton on Sea, Coventry and Wakefield are amongst those to become affordable over the year. Hinckley in Leicestershire, Newcastle upon Tyne, Dover and Beverley in East Yorkshire are among those that have become less affordable during the period.
Wales is the most affordable region in the UK for key workers, with an average house price to key worker earnings ratio of 3.6 in 2012. The North (3.7), Yorkshire and the Humber (3.8) and the North West (3.8) follow closely behind.
By comparison, in 2007, no region had a house price to earnings ratio below 5.0. Unsurprisingly, Greater London (7.6) and the South East (6.6) are still the least affordable regions for key workers.
