South West housing market reaches breaking point

High housing costs and low wages are pushing many areas of the South West out of reach for local people according to a new report from the National Housing Federation.

South West Broken Market, Broken Dreams warns that while the average house price in the region is now close to £230,000, earnings in the region are among the lowest in England, making house prices on average nearly ten times annual incomes.

In rural and coastal areas, the situation is even worse. With beauty spots commanding premium house prices and attracting wealthy second home owners, spiralling prices are forcing young people to move elsewhere. In the Cotswolds the average house price is £344,614, nearly 15 times the average annual salary. The average salary is £23,551 but the average salary needed for a mortgage is more than three times that at £78,769.

As more people in the region are priced out of buying a home, the number of private renters is increasing. As well as having short-term contracts that offer little stability, private renters in the South West are spending over a third (35 per cent) of their earnings on rent – the third highest rent-to-income ratio in the country.

To fix the housing crisis in the South West an increase in the supply of homes is urgently needed. Over the next 20 years 439,000 new households are expected to form in the region. At the current rate of house building, that would leave a shortfall of almost 200,000 by 2031.

Jenny Allen, external affairs manager for the South West at the National Housing Federation, said:  “Spiralling house prices and low, stagnant wages are changing the nature of many towns and villages in the South West as many young people and key workers are forced to move elsewhere to set up home. New affordable homes are vital for the stability of communities across the region.

“The housing crisis in the South West has been more than a generation in the making so short term initiatives aren’t going to fix it for this generation, or the next. We are calling for the next government to commit to ending the housing crisis within a generation by publishing a long-term plan for housing within a year of coming into power.”