First-time buyers need salaries of £29,079 to get onto the property ladder in the West Midlands – meaning the average worker falls more than £8,000 short, new research claims.
Research from KPMG shows the tipping point required to buy a home in the region is edging closer to the £30,000 mark, on the basis of a loan-to-income ratio of 4.5.
Experts say with the average annual wage in the region standing at £20,431, people will increasingly struggle to stump up a 10 per cent deposit.
The gap between these two figures has created an environment where only those earning over the average, or those inheriting money, can afford to buy, they claim.
But it’s not just home ownership that’s the issue – a KPMG-commissioned poll has revealed that 70 per cent of people feel there is not enough housing in the UK that is affordable. Meanwhile, more 27.6 per cent of those surveyed worried about how they will afford, or continue to afford, their own home or pay their rent.
Mike Steventon, Midlands chairman at KPMG, said: “These figures make for frightening reading and show that housing affordability in the region is no longer just a problem for lower wage earners. Now unless you have an above average income or receive an inheritance, it is unlikely you will be afford to buy in the West Midlands.
“And yet this isn’t just about home ownership, because our findings show genuine concern over wider affordability of housing, whether buying or renting. Being able to live in a stable home is a basic human need, tied up with important feelings of choice and certainty, and we are living in a world now where only a few can hope for that, which cannot be right.
“Last year we worked with Shelter to publish a blueprint for the next Government to tackle the housing crisis once and for all. That report looked in-depth and cross-tenure, and these latest figures are a sure indication that more needs to be done. Politicians need to develop an apolitical, long-term housing strategy, engaging both public and private sectors, to get the UK building and stabilise our housing market. Reforms must be wide-spread: further unlocking public sector land banks, boosting small and self-builders, giving power to towns and cities to build the homes they need, and increasing investment in affordable homes are some of the ways government can match businesses’ commitment to achieve this.”
Researchers claim the aspirations of people across the West Midlands are in stark contrast to the reality.
The poll revealed that it remains a region of wannabe homeowners, with 71.3 per cent of people in the West Midlands saying they want to buy, rather than rent, with 52.2 per cent of people saving owning property helps save for retirement.
Of those not already on the property ladder in the West Midlands, the research found 49.1 per cent would like to buy within the next 10 years.
Some 43 per cent are concerned about the next generation, agreeing that more must be done to help young people onto the housing ladder, while 61 per cent believe that more houses should be built.
This jarring between aspiration, fears and reality is yet another example of the need to find a long-term solution to the current housing crisis, according to Mr Steventon, who said this showed the next incumbent in Number 10 needed to act.
He said: “With the election just a week away, we again call on the next Government to act decisively on housing so that people’s basic housing needs and their longer-term aspirations can be met, whatever they might be.”