Homes ‘more affordable’ for key workers

EXPERTS have reported a mixed outlook for the beleaguered housing market today, as separate studies showed positive news for key workers on the look out for affordable housing – but a large proportion of adults admitted they were financially unable to move home.

A Bank of Scotland survey revealed that seven out of ten Scottish towns are calculated to be affordable for the average key public sector worker such as nurses, teachers, police officers, fire fighters and paramedics – a “considerable improvement” on September 2007 when homes in just 16 per cent of Scottish towns were affordable.

• Read the full BoS survey (PDF)

New figures from mortgage broker the Mortgage Advice Bureau also showed positive signs as they reported that the number of mortgage applications increased again in March – despite recent interest rate rises and the end of the Stamp Duty exemption for first time buyers.

However, a third report from estate agent Countrywide found that almost half of young people aged under 35 cited deposit affordability as a barrier to buying a property.

When people were asked about their reasons for not moving home, just 62 per cent claimed they were happy where they live, while one in five were unable to afford a deposit, 16 per cent said they could not afford mortgage repayments, 16 per cent listed moving costs and fees such as stamp duty as a barrier to moving and just over one in ten cited job insecurity as a concern.

Market uncertainty played less of a part, with only 5 per cent of survey respondents listing the anticipation of house prices falling as a factor preventing them from buying a property at this time.

“These findings confirm that we are at a crossroads for homeownership, where we could see the next generation becoming a nation of renters without the right intervention from government,” said Grenville Turner, chief executive of Countrywide.

According to the Bank of Scotland report, however, all five key worker occupations analysed saw large improvements in affordability since September 2007. The most considerable gains have been for firemen, with an increase in affordable towns from 2 per cent in 2007 to 63 per cent in 2012. Firemen are followed by nurses with a rise from 2 per cent to 59 per cent and teachers – 18 per cent to 76 per cent.

In 2007, Wishaw in North Lanarkshire was the only affordable town in the entire UK for nurses.

The least affordable areas of Scotland for key workers are Inverurie, with a house price to earnings ratio of 6.6, Stonehaven with a rating of 6.3 – and Edinburgh at 5.9.

At the other end of the scale, the most affordable town for key workers is Bellshill with an average house price to key workers ratio of 2.5.

Nitesh Patel, housing economist at Bank of Scotland, said: “Housing affordability for key public sectors workers has improved significantly across Scotland.

“However, there are still considerable affordability issues for key workers in Aberdeenshire and Edinburgh.”