24 April 2014 | 4 minutes read

Cobalt Housing today backed a National Housing Federation report that reveals the housing shortage on Merseyside is pushing house prices and private rents out of reach for local workers – with the crisis set to get even worse by 2020.

Home Truths 2013/14: North West reveals:

  • The average home costs around eight times the average income in Sefton and Wirral[1],[2]
  • A gross annual income of £32,304 is needed for the average mortgage in Merseyside2
  • Private rental costs across Merseyside are predicted to rise by 22% by 2021[3]
  • Less than two thirds (64%) of the number of new homes needed in the whole of the North West are currently being built[4],[5]

It warns that while workers in Merseyside have seen the average wage rise by just  29% between 2002 and 2012[6], house prices have rocketed more than two and a half times as fast – by a staggering 76%[7].

The average salary in Merseyside is £19,776[8], but the average house price increased to £141,331, seven times the average salary[9], leaving thousands of workers and families priced out of the housing market.

Alan Rogers, Managing Director of Cobalt Housing, said: “The report’s findings also underline the vital role that social landlords across Merseyside are playing – providing homes for people in very real need because of the crisis in the housing market.

“As well as providing quality homes at rents that are much cheaper than the private sector, we are also investing in communities to provide new, affordable homes in popular, well-managed neighbourhoods.

“Between 2011 and 2015, Cobalt is investing more than £16million to provide more than 170 affordable new properties to help regenerate our communities.”

The report blames the North West’s affordability crisis on the housing shortage across the region, with less than two thirds (64%) of the homes the region needs being built. Each year, 17,500 new households are expected to form in the North West4 but in 2012/13 just 11,160 homes were built, nearly 3,000 of which by housing associations[10].

On Merseyside, private rents have increased by 22% between 2002 and 2012[11] with Wirral and Knowsley seeing the greatest rises – up 24% and 23% respectively. On top of this, rents across the region are expected to rise a further 39% by 2021[12].

The report reveals the state of the housing market across the five boroughs of Merseyside.

Ratio of   house prices to income 20121,2 %    House price increase 2002 – 20122 % private   rent rise 2002 – 20123
Sefton 8.1 63% 21%
Wirral 7.9 81% 24%
Liverpool 6.6 86% 21%
St Helens 6.0 63% 20%
Knowsley 5.9 75% 23%

 

With house prices and rents rising so rapidly, Home Truths 2013/14: North West also warns that rising housing costs are forcing more people to rely on Government help to stay in their homes. With the Government currently spending more than £23bn a year on housing benefit, in the North West there has been a 112% increase in working people claiming housing benefit between 2009 and 2013[13]. Much of this goes into the pockets of private landlords, when that money could be put towards building new affordable homes.

Home Truths 2013/14: North West was launched at Symphony Housing Group in Liverpool today, chaired by Chief Executive Phil Gandy. Mayor of Liverpool Joe Anderson and City Councillor Ann O’Byrne spoke at the event. They were joined by senior representatives of housing associations and the National Housing Federation to discuss how they can work in partnership to ease the housing crisis and support continuing economic growth in the region.

Katie Teasdale, North West external affairs manager for the National Housing Federation, says: “High house prices, rising rents and stagnant wages in Merseyside are not only making life extremely difficult for people living and working in the region, but they are also affecting employers and businesses and risk holding back economic growth. Merseyside workers are becoming a generation of renters, unable to get on the housing ladder and faced with continually rising rents.

“With more support, housing associations across the North West can be real catalysts for change for local communities. They are in it for the long term and can actively drive forward a balanced economic recovery.”


[1] Annual Survey of Hours and Earnings (ASHE), Office for National Statistics (ONS) 2002 and 2012

[2][2] Simple average house prices – Land Registry Data

[3] Projections for National Housing Federation – Oxford Economics 2013

[4] Household population projections by district, England 1991-2021, interim 2011  – based Department of Communities and Local Government (DCLG) April 2013

[5] Live table 253, Permanent Dwellings started and completed, by tenure and district DCLG

[6] Annual Survey of Hours and Earnings (ASHE), Office for National Statistics (ONS) 2002 and 2012

[7] Simple average house prices – Land Registry Data

[8] Annual Survey of Hours and Earnings (ASHE), Office for National Statistics (ONS) 2002 and 2012

[9] Annual Survey of Hours and Earnings (ASHE), Office for National Statistics (ONS) 2002 and 2012

[10] Live table 253, Permanent Dwellings started and completed, by tenure and district DCLG combined with Homes and Communities Agency completions data

[11] Projections for National Housing Federation – Oxford Economics 2013

[12] Projections for National Housing Federation – Oxford Economics 2013

[13] Housing benefit statistics (Stat- Xplore)  – Department for Work and Pensions (DWP)

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