Homebuyers in Hartlepool pay 5 times average wage

ANALYSIS: TUC regional secretary Beth Farhat
ANALYSIS: TUC regional secretary Beth Farhat

HOMEBUYERS in Hartlepool and paying an average of 4.5 times their salary for new houses.

Union bosses say the combination of soaring house prices, stagnating pay in the run-up and the longest real wage squeeze in over a century will leave house prices more out of reach than ever before.

The statistics have been compiled by the TUC, and suggest that homes across Hartlepool and the rest of the region are now out of reach for most people - and showing no signs of getting better.

The TUC analysis of average salaries and house prices by local authority area shows that in 1997 the average house price in every area of the North-East was less than four times the average salary.

By 2013 not a single area had this level of affordability, and latest figures show average house prices are now around five times the average wage.

In Hartlepool, back in 1997 the house price to wages ratio was 2.93. Latest figures show that ratio is now at 4.50.

The Bank of England has recently instructed banks to limit the proportion of mortgages they offer that are more than four and a half times applicants’ salaries.

Recent analysis by the TUC found that pay packets in the North-East fell by around £1,320 a year in real terms between 2010 and 2013.

TUC regional secretary Beth Farhat said: “Over the last 16 years, house price rises have outstripped peoples’ pay packets and left huge swathes of the region unaffordable.

“Last year, house prices in nearly half the North East’s local authority areas were more than five times the average local salary.

“Unfortunately, the situation is compounded because our region has the highest unemployment rate and the lowest wages in the country.

“We need to build more homes to get house prices back under control. With interest rates low, now is the perfect time for an ambitious programme of home-building, which would also help tackle local unemployment problems.

“But as more people give up on buying a home or decide they don’t want to get on the housing ladder, we also need a better deal for renters so that they don’t get clobbered by soaring rents.”

She added: “Housing affordability isn’t just about house prices though. At the moment, earnings and house prices are going in opposite directions, pricing ordinary people out and denying them something as fundamental as a roof over their head.

“More and better jobs 
and decent wages would go a long way to limiting the impact of property price hikes for everyone.”