Homes hope for key workers

But amid all this gloom there is one light shining at the end of the tunnel. If you hang on to your job, buying a decent home of your own has become significantly more affordable over the past four years.

Property has become 14 times more affordable for key public sector workers since house prices peaked in the third quarter of 2007, according to the latest research by the Halifax. This is because property has fallen in price, while public sector salaries have risen.

For example, whereas average house prices in 2007 were 228,041 and average key worker salaries were 31,994, house prices have now fallen to a typical 174,950, while earnings have climbed to 35,399 across the UK.

Therefore, while a typical teacher or nurse struggled to buy a home anywhere in the UK in 2007, they can now easily afford to become homeowners in four out of ten towns and cities, even if they are buying on their own, according to the Halifax.

Furthermore, this estimate is conservative. Far more locations have become affordable when buying with a partner, because Halifax bases its calculations only on a single-income household.

Once two incomes are taken into account then property in many more parts of the UK becomes more affordable.

Nevertheless, Halifax housing economist Nitesh Patel warns that recent improvements mask the deterioration of housing affordability for key workers when compared to a decade ago. Almost two-thirds of towns were affordable in 2001, compared with 38 per cent today.

Patel said: "Housing has become more affordable for key public sector workers across the country since house prices peaked in 2007. This is because of lower house prices combined with increased earnings.

"Over a longer period, the number of affordable towns in 2011 remains significantly lower than a decade ago. In 2001, two-thirds of towns were affordable, compared to just a third today. Government schemes to assist low-cost home ownership are welcome, although it remains to be seen how big the impact on key workers will be."

Hardest hit over the last decade have been nurses, who ten years ago could afford to buy in more than half the UK but are now effectively barred from 78 per cent of locations if buying on their own.

Even in some parts of Scotland they will struggle to buy a home, despite those here seeing their earnings typically go up from 28,431 in 2007 to 30,974 in 2011.

In Edinburgh, where prices average 194,623, for example, they will have to find more than six times their earnings to get a home. Even in Glasgow, where prices are lower at 139,598, nurses will have to raise some 4.5 times their earnings.

But matters improve in other locations, cheapest of which is Grangemouth, where one can buy a typical home for 85,877 and a nurse can buy a property by borrowing just 2.7 times her earnings. Similarly, in Lochgelly, one of the most affordable places in the UK where a decent home costs 96,817, a nurse will be able to buy on just over three times earnings.

Teachers are slightly better placed but they will still have to borrow more than five times their income to afford a typical home in Edinburgh. Glasgow, though, is within their reach.

The Halifax estimates that a multiple of four is affordable, while beyond that property is too expensive. A teacher, typically earning 35,354 in Scotland, can buy an average home in Glasgow on less than four times salary.

Yet in 2007, when teachers were earning about 32,825 and Glasgow property averaged 169,423, they would have had to borrow more than five times their earnings.

Firemen, whose average earnings have increased over this period from 28,932 to 31,289, have seen among the sharpest improvements in their ability to be able to afford a home of their own.

Policemen, who are today typically earning 36,058, have also seen more homes come within their reach. But even officers must borrow more than five times earnings to buy in Edinburgh.

Yet the property market has still been a game of snakes and ladders for teachers, nurses and other key workers in Scotland, who could buy by borrowing 2.8 times their salary in 2001. This rose to 5.3 per cent in 2007, and has now fallen to 4.2 per cent.

Given the Halifax's assumption that above four is not affordable, this indicates that on average Scotland remains pricey, certainly for anyone trying to buy on their own.

Out of the 12 regions of the UK, Scotland is the sixth most expensive for key workers, after London, the south-east, south-west, East Anglia and West Midlands.

Even so, key workers can buy here for an earnings multiple of 4.2, which is below the UK average of 4.9.

Unsurprisingly, the least affordable areas for key workers are all in London. In Kensington and Chelsea they would have to borrow 16.5 times their earnings, in Westminster 13.6 and in Camden 12.4.

Across the UK, the most affordable regions for key workers are the north of England, with a house price to average key worker earnings ratio of 3.7 in 2011, followed by Yorkshire and the Humber, the north-west and Wales (all 3.8).