Latest Public Sector News


LGA: Home ownership unrealistic dream as prices rise to 8 times income

The average house price in England is now almost eight times the average salary, the LGA has warned.

According to government figures, house prices have risen by a fifth in 10 years. In 2000 the average house price was 3.96 times the average income, whereas last year it had climbed to 7.72 times the average wage.

In the south east this increases to 10 times the average salary, and in London it rockets to 12 times the average wage. Even in the north east, where the gap between house prices and earnings is at its smallest, the average house still costs five times the average income.

In the cheapest part of the country, a generous 20% deposit will set back the average buyer their income for the entire year, rendering the prospect of home-ownership unachievable for many.

The LGA is calling for urgent investment into housebuilding and infrastructure so that the affordable homes that the country so desperately needs can be delivered.

At the moment councils are restricted in their ability to borrow to invest in new housing, meaning that despite approving nine out of 10 planning applications, the housing demand still cannot be met.

In the 1970s, when sufficient housing was last built to meet the demand, 40% of new builds were built by local authorities. In last year alone, councils lost more houses through the Right to Buy scheme than were built in the last five years, meaning a deficit in affordable housing.

In addition to more borrowing powers, councils are calling to keep 100% of the proceeds from sales under the Right to Buy scheme. Currently, councils keep just a third of replacement costs, with a portion of the remaining funds going to the Treasury. The LGA supports these demands, believing that this is the only way in which there can be a resurgence in council housebuilding in order to meet the ever-increasing need for affordable housing.

The association’s housing spokesperson, Cllr Martin Tett, said: “When house prices are almost eight times the average income, it’s clear that we have a serious shortage of affordable homes, which is shattering the dream of home-ownership for too many people.

“Councils are doing all they can to encourage housebuilding, by approving nine in 10 planning applications, but the fact is we’re hamstrung by restrictions on our ability to borrow to build. These must be lifted, so we can invest in the new homes our communities need.

“Families around the country desperately need more affordable homes and more routes into home-ownership. A model of Right to Buy that actually allows councils to build more homes would vastly increase the opportunities for these families – without it the scheme will grind to a halt.”

Have you got a story to tell? Would you like to become a PSE columnist? If so, click here


There are no comments. Why not be the first?

Add your comment


public sector executive tv

more videos >

last word

Prevention: Investing for the future

Prevention: Investing for the future

Rob Whiteman, CEO at the Chartered Institute of Public Finance (CIPFA), discusses the benefits of long-term preventative investment. Rising demand, reducing resource – this has been the r more > more last word articles >

public sector focus

View all News


Peter Kyle MP: It’s time to say thank you this Public Service Day

21/06/2019Peter Kyle MP: It’s time to say thank you this Public Service Day

Taking time to say thank you is one of the hidden pillars of a society. Bei... more >
How community-led initiatives can help save the housing shortage

19/06/2019How community-led initiatives can help save the housing shortage

Tom Chance, director at the National Community Land Trust Network, argues t... more >


Artificial intelligence: the devil is in the data

17/12/2018Artificial intelligence: the devil is in the data

It’s no secret that the public sector and its service providers need ... more >