SOUTH EAST HOUSING CRISIS REACHES BREAKING POINT
11 April 2014
The housing shortage in the South East is pushing house prices and private rents out of reach for local workers, according to a new report – with the crisis set to get even worse by 2020.
Launched at a Surrey Connects event in Guildford on Thursday 10 April, Home Truths 2014: South East from the National Housing Federation warns that while the average salary in the region rose by just 23% in the last ten years1, house prices rocketed more than twice as fast, by 56%2.
The report reveals:
- A gross annual income of £65,067 is now needed for the average mortgage in the South East2, well over double the average salary of £23,3791.
- Rural areas are especially affected with the average home costing almost 14 times the average income.1,2
- The average house price in the region is now £284,666 - 56% higher than the average for 20022.
- Prices are expected to rise a further 41% by 2020, the second biggest rise in England5.
Rising housing costs are bad news for the economy with 78% of South East businesses warning that a lack of affordable housing would stall local economic growth and 68% saying it would affect their ability to attract and keep workers6. Every home built brings £116,635 into the South East and creates 2.4 jobs directly and in the wider community3.
The report blames the South East’s affordability crisis on the housing shortage in the region. Only half of the homes the region needs are being built, with 38,5004 new households expected to form in the South East each year but just 19,6507homes built in 2012/13.
It also found that private rents in the region are expected to rise by 2020, up 40%5. Elmbridge and Epsom & Ewell have seen rises of 48% and 41% respectively between 2009 and 2013, with further increases of 41% and 38% predicted by 2020.
Warren Finney, South East external affairs manager for the National Housing Federation, says:
“High house prices, rising rents and low and stagnant wages in the South East are not only making life extremely difficult for people living and working in the region, but they are also affecting employers and businesses and risk holding back economic growth.
“We need Local Enterprise Partnerships to work with councils, housing associations and others to take a strategic lead on getting more homes built at the right price in the right places, which will help revitalise communities and create jobs.
Mark Pearson, Surrey Connects chief executive said: “Business managers regularly tell me that the shortage of affordable housing stock in Surrey is affecting their ability to recruit and retain employees. We need to take action to address this situation or companies may relocate their operations elsewhere.”
- Annual Survey of Hours and Earnings (ASHE), Office for National Statistics (ONS) 2002 and 2012
- Simple average house prices – Land Registry data
- Economic impact database, Centre for Economics and Business Research (CEBR) for National Housing Federation, 2013
- Household population projections by district, England, 1991-2021, interim 2011-based-Department for Communities and Local Government (DCLG) April 2013
- Projections for the National Housing Federation – Oxford Economics 2013
- Survey for the National Housing Federation – ComRes 2013
- Live Table 253, Permanent dwellings started and completed, by tenure and district – DCLG 2012/13