In London, the average price of a property now stands at almost six and three quarter times a teacher's average annual pay compared with just over four times earnings ten years ago.
Halifax research also shows it would require a hike in teachers' average earnings of between £9,800 and £18,750 a year in the four regions that comprise southern England (Greater London, the South East, the South West and East Anglia) to restore the relationship between house prices and teachers' pay to levels in 1992. In the capital, average pay would need to be raised from £29,020 to £47,775.
The situation is the opposite in other areas around the UK, with homes proving more affordable in the North, Yorkshire and the Humber, the North West and Scotland than it was ten years ago. For instance the house price/earnings ratio for teachers in the North West is currently 2.68 compared to 3.06 in 1992.
The Halifax plans to examine affordability ratios for a number of other occupations, but the difficulties faced by teachers in London have become much worse in the last five years with a doubling in property prices far outpacing the 29% gain in teachers' pay. Teachers in the South East, the South West and East Anglia have fared only slightly better than those in the capital since 1997.
Housing is more affordable for teachers in the North, Yorkshire and the Humber, the North West and Scotland than it was ten years ago despite the overall worsening for British teachers as a whole and the marked deterioration in the affordability situation in southern England.
There are already schemes up and running targeted at helping key workers to get onto the property ladder.
Part of the Government's £250 million Starter Home Initiative is to assist some teachers to buy a home in areas where high house prices are undermining staff recruitment and retention. The recently announced London Plan includes a target to build a minimum of 459,000 homes in the capital by 2016. 50% of these should be affordable to those on low or moderate incomes who cannot afford private housing but do not qualify for social housing.
Martin Ellis, Halifax Group Economist, commented: “The severe problems that many teachers face in getting onto the property ladder in southern England underline the difficulties local education authorities have in recruiting and retaining teachers in this part of the country. Hopefully, along with the measures the Government has already put in place, there will be a series of policy initiatives in the Comprehensive Spending Review that will go some way towards solving the problem.”
The Government's Starter Home Initiative - £250 million has been available over three years (2001 to 2004) to help key workers in areas where high house prices are undermining staff recruitment and retention.
These schemes provide £10,000 equity loans to key workers with bids to administer the schemes assessed by the DTLR and the Housing Corporation. Registered social landlords will run these schemes.
