Key workers cannot afford to buy in three out of five towns

House prices in three out of five towns are beyond the reach of key workers, despite housing affordability improving since house prices peaked in 2007.

The Halifax reported this morning that 38% of towns are now affordable to nurses, paramedics, firefighters, teachers and police, compared with just 3% in 2007.

However, the most affordable towns are all in the north or Wales, with the least affordable in London and the home counties.

The improved picture since 2007 also masks the worsening situation over the decade, as more key workers become increasingly reliant on the private rented sector.

Almost 64% of towns were affordable in 2001, and over the last decade it is nurses who have been worst hit: in 2001, they could afford to buy in 55% of towns, whereas today only 22% of towns are affordable on a nurse’s average salary.

In London, there are no affordable boroughs for any of the key workers, compared with two affordable boroughs (Barking and Dagenham, and Newham) ten years ago.

In the rest of the south-east, there are just two affordable places, Dover and Portsmouth, compared with 26 affordable towns ten years ago.

In the most affordable town, Nelson in Lancashire, a key worker can buy a property for 2.1 times their earnings. In Greater London, the average house price is 7.1 times a key worker’s average salary.