Average earners in the North West would need to take home up to £34k more a year, just to keep up soaring house prices

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Average earners in the North West would need to take home up to £34k more a year, just to keep up soaring house prices

People on average wages in parts of the North West would need to more than double their annual salary just to keep up with out of control house prices, new research by Shelter shows.

To investigate how out of sync house prices have become, the charity looked at wage and house price inflation since 1997 in every area of the region.

This was then used to calculate what average annual earnings would be if they had risen at the same rate as house prices.

The impact of the housing shortage has been widespread, with the latest Census showing a 6% drop in the proportion of home owners in the North West.

Meanwhile across the country the gap between wages and house prices continues to grow. In the late nineties the average house cost five times the average salary, but by 2012 it had jumped to a massive ten times. This leaves thousands of people priced out of the property market and with no choice but to live in unstable private rented homes, or remain in their childhood bedroom well into adulthood.

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The charity is warning that if house prices are left to rise further this will not only price out future generations hoping for a stable home, it will also makes things even harder for the thousands of families already struggling to keep up with their high housing costs each month.

Shelter is calling on the government to address the serious shortage of affordable homes as a matter of urgency, and give young people and families who work hard and save money each month the chance of a stable home.

Case study: Angelique (24) and her partner John (29) are currently renting. Angelique works as an engineer and John an IT manager but, despite taking home a decent wage each month, the high cost of renting combined with expensive property prices means that they don’t think they will ever be able to afford a home of their own.

Angelique said: “After rent, food and bills there’s very little left each month, which makes saving enough for a deposit impossible. I always thought that if I worked hard and had a good job I’d be able to get a foot on the property ladder, but that’s just not the case these days. It feels like the only way we’d ever be able to afford our own place is if we won the lottery!”

Campbell Robb, Shelter’s Chief Executive, said: “When you’d need to more than double your salary just to keep up with rising house prices, it is no surprise that the dream of a home of their own is slipping further out of reach for a generation.

“Politicians need to start meeting people halfway by committing to bold solutions that will get more affordable homes built. Otherwise future generations will find themselves priced out of a stable home, however hard they work or save.

“The reality is that successive governments have failed to build the affordable homes that this country needs, and as a result our housing shortage has reached crisis point.

“Despite the fanfare surrounding Help to Buy, pumping money into mortgage guarantee schemes is not the solution. This further inflates prices by increasing demand for an already limited number of homes, and will only make things worse for the next generation of first time buyers. The only solution is to build more affordable homes.”
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