House prices getting further out of reach

FOR SALE: But salaries of workers in parts of the country fall well short of mortgage requirements, says report
FOR SALE: But salaries of workers in parts of the country fall well short of mortgage requirements, says report
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Workers in Lancashire need a 50 per cent pay rise to afford a typical mortgage, according to new figures.

With house prices rising by 4.2 per cent over the past year in the North West, the cost of buying a home is getting further and further out of reach for many people, says the National Housing Federation.

Across the county the average salary is now £24,024, yet the income needed to get an 80 per cent mortgage is £36,155 - a staggering half as much again. And in some boroughs including Preston, South Ribble and Chorley, the shortfall is even bigger.

“In many areas there is a mounting affordability crisis,” says the NHF’s annual Home Truths report. “The average worker in the county would need a 50 per cent pay rise - or an extra £12,000 a year - to be in with a chance of getting an average mortgage.”

In Preston the average house price is now £142,030. To get a typical 80 per cent mortgage an average worker would need to earn £32,464, when in fact the average wage is still only £20,878 - almost £12,000 a year short.

Things look worse in South Ribble where the average house price is now £167,123, the average wage £24,476 and the income needed to qualify for a mortgage £38,200.

And in Chorley the average house costs £177,270, the average wage is £24,019 and the salary needed is £40,519.

With talk of a Northern Powerhouse, the NHF adds: “The North West is a strong, vibrant region, but its acute housing crisis needs to be addressed so it can meet its economic aspirations.

“Homes cost around seven times the average income and in pockets of high value that rises to more than 10 times.”

Ribble Valley has the biggest gap between incomes and mortgage requirements of £22,000. It also has the highest private rents averaging £623 a month.