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New data shows deepening of housing crisis
17 October 2016

In a busy week for official data releases, DCLG has published an update to its affordability dataset for England, providing figures for 2014 and 2015.

Affordability, expressed as the ratio between average house prices and average earnings, is a key metric for understanding the scale of the housing crisis at the local level.  This release (the first in more than two years) is therefore of great importance for those involved in the planning and delivery of housing.

Some of the key headlines include:

• The Median Affordability Ratio for England as a whole is now 7.5, meaning that the average house now costs 7.5 times the average gross salary. This is up from 6.9 in 2013

84 Districts now have a ratio of 10 or greater – up from 49 in 2013. This includes districts in the Midlands (Bromsgrove, Rutland and Stratford-on-Avon) and Yorkshire (Harrogate)

• Districts in the London commuter belt have seen some of the largest increases – including Sevenoaks (rising from 10.4 to 13.9), Maldon (from 7.2 to 10.7), Dacorum (8.9 to 12.0) and Three Rivers (10.7 to 12.3)

Just 27 districts across England have ratios lower than 5.0 – the maximum income multiple that mortgage providers will typically lend to an individual

Although the Planning Practice Guidance (PPG) made it clear that local plans should seek to address adverse ‘market signals’ (such as worsening affordability) back in 2013, the issue has gained little traction with Inspectors and there are only a handful of examples where housing requirements have been explicitly increased on grounds of adverse market signals.

This new data makes two things clear:  That current level of housing supply is not sufficient to improve affordability; and that the issue is not confined to London and its immediate commuter belt.

Affordability Map created by Barton Willmore