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Housing “more affordable” for key public sector workers

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01/06/2012
Housing affordability has improved considerably for key public sector workers since house prices peaked in September 2007, a report has found.

Housing affordability has improved considerably for key public sector workers since house prices peaked in September 2007, a report has found.

According to a survey by Halifax, more than four in ten towns are now affordable compared with just 3% in 2007. It said the greatest concentration of this improvement has been in northern England, Wales and Scotland, while affordability issues for key workers persist in London and the South East.

Martin Ellis, housing economist at Halifax said:

“A combination of house price declines and growth in earnings has contributed to this improvement in affordability. However, house prices nationally have changed little in the past year, which together with pressure on public sector earnings, has resulted in only a modest improvement in home affordability for key workers in the past 12 months.”

The survey took into account five key worker occupations including nurses, teachers, police officer, fire fighters and paramedics – all of whom have seen improvements in affordability during the period.

The most considerable gains have been for primary and secondary teachers with an increase in affordable towns from 6% in 2007 to 47% in 2012, followed by police officers which saw an increase from 15% to 51%.

Halifax said that 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, Yorkshire and the Humber and the North West follow closely behind. By comparison, in 2007, no region had a house price to earnings ratio below 5.0. Greater London and the South East are still the least affordable regions for key workers, with an earnings ratio of 7.6 and 6.6, respectively.

Meanwhile, research from Mortgage Advice Bureau found that the number of mortgage applications increased in March 2012.

It said that worries over further increases to lenders’ SVRs and the withdrawal of upfront discounted deals helped push mortgage applications up by 98.1% from December 2011.

Applications are now 5% higher than the same time last year.

At the same time the number of borrowers choosing fixed-rate deals increased to 78.7% in March from 73.3% in February – the highest level in the last 12 months.

Brian Murphy, head of lending at Mortgage Advice Bureau, said:

“Demand remains strong and it has been a strong first quarter for mortgage activity. Despite rising rates and the end of the Stamp Duty holiday in March, the number of mortgage applications for both purchase and remortgaging increased again last month.”

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