The West Midlands is building half as many new homes as needed each year, housing associations have warned.
While the number of households in the region increases by 18,000 a year, only 8,250 new homes are built. And many homes are out of the reach of ordinary households, as the average price is £177,913 – nine times the average West Midlands wage of £19,864.
The figures are revealed in a new report by the National Housing Federation, which represents 1200 housing associations in England.
It was launched at a House of Commons reception hosted by Solihull MP Lorely Burt (Lib Dem Solihull) and attended by MP Gisela Stuart (Lab Edgbaston) and Councillor John Lines (Con Bartley Green), Birmingham’s Cabinet Member for Housing.
The study, West Midlands Home Truths, found that a person buying the average West Midlands home with a 75 per cent mortgage needs a deposit of £44,500 and an income of nearly double the regional average.
This is based on the assumption that a buyer puts down a mortgage of 25 per cent, and then obtains a mortgage of no more than three-and-a-half times their salary – which would mean they needed a minimum income of £38,124, while the regional median salary is just £19,864.
The report says: “While the West Midlands has suffered through the recession and spending cuts, the housing market has failed to respond. House prices remain high and, when combined with mortgage lending restrictions, continue to be beyond the means of most families on modest incomes. Private sector rents are rising and the social housing sector is under enormous strain.
“Homelessness is increasing faster than anywhere else in the country and social housing waiting lists have grown by 64 per cent in the last 10 years. Overcrowding is also on the rise, with a 14 per cent increase over the last two years.
"To fix the broken market, ministers should implement a range of measures that ensure housing continues to be built at scale, remains affordable and is effectively regulated.”
The study notes that a quarter of homes in the region sell for £108,000 or less. A mortgage for a property at this price would require an income of £23,142, while the deposit at 25 per cent would be £27,000.
Buying a house is more of a challenge in some places than others, the study warns.
In Stratford-Upon-Avon, the average property costs £289,351, which is 13.5 times the average salary in the town of £21,414.
And in South Shropshire, the average home costs £239,404, 14 times the average salary of £17,113.
By contrast, the average home in Sandwell costs £122,665 which is 6.7 times the borough’s average salary is £18,439 – making homes relatively affordable to local people, although only for those who are able to consider buying at all.
The borough also has 8,887 people on housing waiting lists. Across the West Midlands region as whole, more than 350,000 people are on social housing waiting lists, one in every 14 households.
Gemma Duggan, West Midlands lead manager for the National Housing Federation said: “This year’s Home Truths report shows that – despite a deep recession – house prices in the region remain out of reach for thousands of households.
“As unemployment is on the up and benefits are set to be slashed, private sector rents also look set to rise. To cap it all, we’ve also seen the fastest rise in homelessness of any region and one in 16 social housing households is overcrowded.
"Lack of supply is at the root of the problem. Ministers need to act now to implement a range of measures to turn the tide on the current housing crisis, ensuring that homes continue to be built at scale in the West Midlands, that affordable housing options remain, and that housing is properly regulated across all sectors.”
Sarah Boden, chair of the West Midlands Regional Committee (which represents the region’s housing associations) and chief executive of Severnside Housing said: “With house prices nine times the average wage in the region and private sector rents also set to rise, we must ensure that there is an affordable option for people to live in the West Midlands.
“Housing makes a vital contribution to the economy and, despite the recession, housing associations built nearly half of all of the region’s new homes last year, 12 per cent more than the year before.
"This is a clear sign of our commitment to providing housing solutions to people from all walks of life in the region.
“We are taking the opportunity to remind the Government, local authorities, and the emerging regional bodies such as Local Enterprise Partnerships and Health and Wellbeing Boards of the crucial role housing associations play.’’
> Download a pdf of the report: Home truths 2010: West Midlands