Housing in Watford became more affordable over the last year, new figures show.
Figures from the Office for National Statistics show full-time employees in Watford could expect to spend 12.5 times their annual earnings on purchasing a home in 2023 – down from 13.9 times the year before.
However, the Institute for Public Policy Research said the housing crisis is not only damaging lives but also holding the economy back and called for an increased investment in genuinely affordable homes.
Last year in England, a house cost 8.3 times the average wage, while the ratio stood at 6.1 in Wales – both slightly down from 8.5 and 6.4 respectively.
While this was the second consecutive fall since 2021, these are still higher than before the pandemic in 2019, when buyers spent 7.9 and 5.8 times their annual earnings.
Maya Singer Hobbs, senior research fellow at the IPPR, said: “The housing affordability crisis is damaging lives and holding back the economy. Its root cause is the failure to build enough homes across the country over several decades, including the failure to build enough genuinely affordable homes.”
She added: “To increase housing supply, and ensure homes are more affordable – whether to rent or buy – we need to reform and streamline the planning system, tackle our dysfunctional land market, and increase investment in genuinely affordable homes.”
Overall, housing affordability improved in three-quarters (75 per cent) of local authorities across England and Wales in 2023, worsened in just under a quarter (24 per cent) and remained the same in 1 per cent, the ONS said.
In England, the average home sold for £290,000 in the 12 months to September, while the average full-time wage was £35,100.
Houses in Watford were 2.5 per cent more expensive in 2023 than the year before, at an average price of £410,000. In the meantime, wages saw a 14.7 per cent year-to-year increase.
Cara Pacitti, senior economist at the Resolution Foundation, said: “Although house prices have stabilised in line with earnings since the pandemic, this does little to correct for the gap between earnings and house prices that has opened in the past 25 years.
“While earnings have doubled since 1997, house prices have increased four-and-a-half times.
“This means high barriers to homeownership for the UK’s renters, who are fully exposed to a housing market that offers the worst value for money of any advanced economy.
“The next Government needs to step up urgently to address the lack of affordable, good quality properties – including by building more new homes and modernising our existing housing stock.”
A spokesperson for the Department for Levelling Up, Housing and Communities said: “We are committed to creating a fair housing system that works for everyone, including increasing first-time buyer numbers in all regions and boosting availability of new, genuinely affordable housing.
“Over 876,000 households have been helped to purchase a home since spring 2010 through Government backed schemes including Help to Buy and Right to Buy.
“Our long-term plan for housing will go even further to build the homes that local communities want and need, backed by £10 billion to boost supply and £11.5 billion for affordable homes.”
By Milounee Purohit
BENGALURU (Reuters) – Average home prices in India are set to rise 7% this year and next, driven by purchases of luxury properties, according to analysts polled by Reuters who said the supply of affordable homes would continue to lag demand.
Barely dented by the Reserve Bank of India’s 2-1/2 percentage points of interest rate rises from May 2022 to February 2023, the housing market has powered along with Asia’s No. 3 economy, the fastest growing amongst major peers.
Home prices rose 4.3% in 2023, the fastest since 2018, according to Reuters calculations based on the RBI’s House Price Index.
However, sharp home price rises add to the challenges of weaker segments in the economy that struggle with stagnant wages and poverty.
Poll medians from a Feb. 16- March 1 survey of 13 property market experts showed average home prices in India were forecast to rise 7.0% this year and next, little changed from 6.8% and 7.5% predicted in November.
“We are expecting an uptick in demand for the luxury segment largely due to high-net-worth investors,” said Aniket Dani, Director-Research at CRISIL Market Intelligence and Analytics.
“Developers are channelling their focus towards launching more premium projects, contributing to the challenges faced by the affordable segment.”
In answer to a question on the gap between demand for affordable homes and the supply of them over the coming 2-3 years, five said it would remain the same, four said widen and two said narrow.
Despite the RBI’s efforts to curb inflation with higher rates, a post-pandemic buying frenzy among high-income earners pushed home prices up.
But expectations the central bank will cut interest rates this year should improve affordability.
A majority of strategists, eight of 12, said purchasing affordability for first-time homebuyers over the coming year will improve. Four said it will worsen.
“Interest rates are…likely to drop in 2024, given the RBI has successfully kept inflation levels in check and intends to shift its stance toward supporting growth. This will impact affordability and demand favourably as homebuyers will be eligible for larger loans,” said Vivek Rathi, national director of research at Knight Frank India.
The survey predicted home prices in the large urban centres of Mumbai, Delhi and Bengaluru rising 6.0%, 5.0% and 9.0% this year, respectively.
(Reporting by Milounee Purohit; Polling by Susobhan Sarkar and Anant Chandak; Editing by Ross Finley and Ros Russell)
The first homes have been finished on a new affordable development.
People will soon be able to move into 15 of the one, two and three-bed properties being built near Lynnsport in King’s Lynn.
Some 78 will be built off Salters Road, under a partnership between West Norfolk council, its development partner Lovell and Freebridge Community Housing.
All will be either available at an affordable rent, or available to buy through shared ownership.
Alistair Beales, the council’s cabinet member for business, said: “We know there is a high level of need for affordable homes across the country and west Norfolk is no exception.
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“We have committed, through our corporate strategy, to encouraging housing development that meets local needs so it’s great to see the first of the new homes in an all-affordable development ready for occupation.”
Paul Newbold, director of new homes and commercial at Freebridge, said: “We’re delighted that this much-needed project has now reached the stage that we are able to advertise the first homes at Salters Road.
“We appreciate the urgent need for affordable housing in a central location in King’s Lynn and, in partnership with the council and Lovell, we are very pleased to have been able to help deliver this excellent development.
“We’re looking forward to meeting our first tenants moving into these properties and are happy that the next wave of properties will be advertised in early 2024.”
Michael Saunders, operations manager for Lovell, added: “It’s always really satisfying to reach the point on a development when people can move in so I am delighted we have been able to reach that point on programme.
“I hope the residents are very happy in their new homes and look forward to handing over the remaining phases in the coming months.”
The next homes are expected to be ready for occupation in March and the development should be fully completed by October.”
A project to convert a derelict swimming pool building into new affordable homes has been completed.
The Arthur Hill Memorial Baths site in King’s Road, Reading, has been repurposed to provide 15 one-bedroom apartments for key workers.
The pool was closed in 2016 despite opposition from the Save Arthur Hill Pool campaign.
Work on the project has been ongoing since 2021, and involved the conversion of the entrance building and the demolition of the pool.
The new homes have been reserved for nurses, social workers, teachers, police officers and those in the public sector.
The apartments have been made available through affordable rent on the council’s housing register.
Ellie Emberson, lead councillor for housing at Reading Borough Council, said: “Key workers play such an essential role in our society and it is hugely rewarding to see the council provide 15 affordable homes here in Reading.
“We of course knew the former Arthur Hill pool site was of historical importance for people, so to be able to preserve its façade whilst providing crucial, high quality and affordable homes for our key workers is something which we’re proud of.”
Campaigners had argued that people in the area would be left without swimming facilities.
They also cited the pool’s history, having been built in 1911 on land donated for community use by the family of Arthur Hill, the mayor of Reading between 1883 and 1887.
However, the council insisted it would be too expensive to bring the site up to standard as a swimming pool.
Residents were left without community swimming facilities for six years until the opening of Palmer Park pool in December 2022.
The council has touted energy-saving and heat retention measures in the new flats, involving the installation of triple glazing, air source heat pumps, and solar panels on the roof.
Ms Emberson said: “As with all our housing developments, this is another example of our continued response to the climate emergency and the cost of living crisis by helping our residents deal with energy costs.
“We aim to keep up the momentum by continuing to provide even more affordable homes for people in Reading.”
The project forms part of the council’s ambition to provide 400 affordable new homes between 2021 and 2025.
A ribbon cutting ceremony by Tony Page, the Mayor of Reading, will take place on Thursday.
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