'Generation locked out of housing market'
National Housing Federation claims homes in West Berkshire unaffordable for first time buyers
AN entire generation is being locked out of the housing market in Berkshire according to a study by the National Housing Federation.
The federation, which represents England's housing associations, warns of a unique triple whammy hitting first-time buyers and low-to-middle income earners: steep rises in the private rental sector, huge social housing waiting lists and sustained high house prices.
The study shows that not only do first time buyers now need huge deposits just to secure a loan, but they also face high prices that have stubbornly refused to come down, meaning they are unlikely to get a loan at their income level.
In West Berkshire, the average house now costs £302,530, meaning first time buyers would need a deposit of more than £30,000 and would also need a loan of 12.3 times the average income in the area. Most banks and building societies will not lend more than 3.5 times the annual income of the borrower.
Figures across Berkshire vary widely, with Windsor and Maidenhead the most expensive area at an average price of £421,233 and Slough with an average price of £206,203.
The Federation's Warren Finney said: “Berkshire has become extremely unaffordable for ordinary hardworking people who have little realistic chance of buying their own house, triggering greater demand for good social housing or a desperate search in the more expensive private rented sector.
“Ministers should make a renewed commitment to building the homes we need and identify housing as a key driver for economic activity. The only answer is more affordable homes. We need a reformed planning system that supports the building of affordable homes and the use of suitable surplus public land to build on. The need for new affordable family housing has never been greater.”
The manager of Hamptons International estate agents in Northbrook Street, Charles Wellbelove, said however that there was a flaw in the argument set out by the federation: “Of course, someone who is entering the market as a first time buyer is not buying an average priced home, they will normally be buying at the lower end of the market. It is difficult for first time buyers, but not as difficult as these figures suggest.”
He agreed, however, that the local market has proved resilient despite falls being recorded elsewhere: “What we are seeing is that there is demand, but there is not a huge amount of supply. In West Berkshire, because we have good transport links, we are seeing demand come from out of area, which keeps prices stable.”
Fellow estate agent, Richard Login of Jones Robinson in Bartholomew Street said: “Lenders look at the individual's credit history and income so getting mortgage funds isn't the issue, the issue is getting a deposit.
“The housing market isn't that bad in West Berkshire, house prices are down from their peak in 2007.”
He added that those first time buyers who have already managed to save a deposit may be able to take advantage of the stamp duty holiday for properties costing less than £250,000. This scheme is set to end on March 23.