The annual Halifax Key Worker Housing Review tracks housing affordability for five groups of public sector workers: nurses, teachers, police officers, fire fighters and paramedics in 517 post towns across Great Britain.
The average house price was unaffordable for all five key worker occupations in 70% (363 out of 517) of towns across Great Britain in March 2007, up from 65% (338) of towns last year. Five years ago in March 2002, the average house price in only 36% (185) of towns was unaffordable for all key workers.
Nurses and firefighters face greatest affordability problems
The average house price in 99% of towns (510) was unaffordable for the typical nurse in March 2007, while 97% (504) of towns were unaffordable for firefighters. Five years ago the average house price was unaffordable in only 55% (282) of towns for firefighters and 58% (302) of towns for nurses.
Affordability problems greatest in London and the South West
By region, affordability for key workers is worst in London and the South West with the average house unaffordable for key workers in all 32 London boroughs surveyed and all 34 towns surveyed in the South West. In 2002, the average house was unaffordable for all key worker occupations in 38% (13) of towns in the South West and in 94% (30) of London boroughs.
Truro and Buxton see largest deterioration in key worker affordability
The greatest relative deterioration in key worker affordability in the past five years has been in Truro in the South West. Truro moved from being affordable for some key worker groups in March 2002 to unaffordable for all key workers in March 2007, while its house price to earnings (PE) ratio rose by 5.0 times to 9.4 times. The next largest deterioration was in Buxton in the East Midlands (a 3.2 times increase) and Matlock in the East Midlands (a 3.0 times increase).
Surrey is the least affordable county for key workers
Gerrards Cross in Buckinghamshire is the least affordable place for key workers to buy in Great Britain with a house price to earnings ratio of at least 20.8 times for a key worker. The next least affordable area for key workers is Kensington & Chelsea (London boroughs were included as towns in the analysis) (18.6 PE ratio), followed by Weybridge in Surrey (14.9 times PE ratio). There are 20 towns where the average house price is more than 10 times the average earnings of key workers. Five towns in Surrey have a house price to earnings ratio for key workers of at least 10 times, while all towns in the county are unaffordable - making it the least affordable county for key workers in Great Britain.
Lochgelly is the most affordable town for key workers in Great Britain
Lochgelly in Fife is the most affordable town in Great Britain for key workers with a price earnings ratio of at most 4.1 times for key workers. Five of the ten most affordable towns for key workers are in Scotland. The most affordable town in England is Nelson in the North West with a house price to earnings ratio of 4.5 times for key workers.
Flats are more affordable for key workers. Flats & maisonettes are unaffordable for all key worker groups in only 30% of towns (117 out of 391) across Great Britain at Q1 2007. However, the proportion has risen over the past five years with flats unaffordable for key workers in 11% of towns in Q1 2002.
Key Findings
By Region
House price to earnings ratios for key workers are highest in London and the South East. In London, the average house price to earnings ratio for a nurse is 10.1 (i.e. the average house price is 10.1 times annual gross average earnings) and 9.4 times for ambulance staff. Nurses in the South East have a PE ratio of 9.8.
Key workers have the lowest house price to earnings ratios in Scotland. The average house price to earnings ratio for a police officer in Scotland is 3.9, while for teachers the PE ratio is 4.4.
Over the past five years, house price to earnings ratios have risen the most in Wales, and the North. In these regions the average PE ratio for key workers has increased by 2.8 and 2.6 times respectively since March 2002.
The fewest affordability issues for key workers are in Scotland. Only 15% of towns are unaffordable for all key worker groups in Scotland. However, 50% of towns in Scotland are unaffordable for ambulance staff and 90% of towns are unaffordable for nurses.
By Town
There are 61 towns which have moved from being affordable for all key worker occupations in March 2002 to being unaffordable for all key workers in March 2007. 56 of these towns are located outside the south of England, led by 14 in the East Midlands.
The twenty least affordable towns for key workers are all in the south of England as are twenty nine of the top thirty. The other town is Altrincham in the North West.
Five of the ten most affordable towns for key public sector workers are in Scotland, along with 11 out of the top twenty.
Lochgelly is the most affordable town in Great Britain for key workers. The average price of a house in Lochgelly in Scotland ranges from 3.0 times the average earnings of a police officer to 4.1 times earnings for nurses.
By Occupation
Nurses are the key worker group with the most affordability problems. The average house in only 7 towns (1%) of the 517 surveyed across Great Britain is affordable for nurses. Five of these towns are in Scotland.
Affordability has deteriorated most for firefighters over the past five years. In March 2002, the average house in 55% of towns (282 out of 517) was unaffordable for the typical firefighter. In March 2007 97% of towns (504 out of 517) were unaffordable for a firefighter.
78% of towns (405 out of 517) were unaffordable for teachers in March 2007 compared with 45% of towns (233) in March 2002. 72% of towns were unaffordable for police officers (373 out of 517) in March 2007 compared with 36% of towns (186) in March 2002.
Flats
Flats & maisonettes were unaffordable for all key worker groups in 30% of towns (117 out of 391) across Great Britain in Q1 2007. However, the proportion has risen over the past five years with flats unaffordable for key workers in only 11% of towns in Q1 2002. In Q1 2007 flats were unaffordable for all key worker groups in 88% of London boroughs and the cities of Edinburgh, Oxford and Cambridge.
Flats are least affordable for key workers living in London. The average flat in 88% (29 out of 33) London boroughs is unaffordable for key workers. Additionally, the average flat is unaffordable for nurses in all London boroughs.
Flats & maisonettes are most affordable for key workers in Scotland. All key workers could afford the average flat in at least 88% (49 out of the 56) of towns surveyed in Scotland. Additionally, flats in at least 50% of towns were affordable for all key worker occupations in the North (61%), East Midlands (57%) and Yorkshire & the Humber (50%).
Tim Crawford, group economist at Halifax, commented: “Housing affordability continues to deteriorate for key workers across Great Britain and it is now clearly not a problem confined to the south of England. Nurses face the most difficulties climbing onto the housing ladder but all key worker occupations are likely to struggle to purchase a house apart from in Scotland.
"The government's key worker schemes are providing some relief but given recent trends there would clearly be benefits from broadening their reach."
