Why key workers are increasingly looking north for affordable homes

Why key workers are increasingly looking north for affordable homes

Online estate agents Tepilo take a closer look at the struggles faced by key workers to buy a home in many regions across the UK.

The problem of affordability in the UK property market has once again reared its head, with research carried out by conveyancing firm My Home Move revealing that key workers are being priced out of seven regions throughout England and Wales.

In fact, the prospects of key workers affording a home outright falls below 30% in the East Midlands, East of England, Home Counties, South East, South West and West Midlands. In Greater London, the chances of affording a home are just 1%, with soaring house prices and a lack of supply making sure buying in the capital is out of reach for all but the very wealthy.

Key workers – which include nurses, teachers, paramedics, police officers, prison officers and social workers – have, as a result, been forced to look northwards for affordable homes. Or, alternatively, they have had to turn their attentions to shared ownership schemes or resign themselves to renting for the foreseeable future.

It’s a particular problem in London, where there has been a chronic shortage of nurses, teachers and social workers in recent times. London needs these essential workers, but at the same time these essential workers can’t afford to buy there.

It’s only when a key worker starts earning £40,000 or more, which can take up to ten years’ service to achieve and isn’t universal, that the options become greater. Even then, London, the South East and the Home Counties would still be out of reach. On the upside, a key worker’s chances of affording a home in other UK regions – including in the East Midlands, East of England, South West and West Midlands – goes up by 30% once they are earning a mid or upper-range salary.

Key workers and public sector employees make up a not insignificant part of the overall workforce – 23% to be exact, with one million based in London. If these vital workers can't afford to live near to where they work, vital public services could be put at jeopardy.

While the government has taken some steps to address this issue, with record low interest rates of 0.25% making borrowing cheaper than ever and a range of Help to Buy initiatives on offer, more still needs to be done. Key workers on average salaries are likely to find it extremely difficult, without external help or financial assistance, to purchase a home for the first time anywhere outside of Wales or the North of England. As it stands, large swathes of the country are off-limits.

Even when people start earning a better salary, and reach the top in terms of their career, the pool of potential regions is still not opened as wide as it should be. A key worker's hopes of buying a home outright in London, the Home Counties or the South East are slim to none, even with more money in the bank and years of experience behind them.

Another government solution – to help key workers and first-time buyers onto the ladder – is shared ownership. This, though, doesn't suit those who are keen to own their own home fully and not willing to do so on a leasehold basis. It might be a family keen for stability, unwilling to settle for shared ownership, or it might be a young couple desperate to own their home outright for the added safety and security this brings. If key workers know they have a house to call their own, that takes away a layer of stress and insecurity and will surely allow them to do their jobs better.

Like the rest of the issues in the housing market, there is no quick-fix. But the government could surely do more, away from schemes and initiatives, to really help people struggling to get a foothold on the ladder for the first time.

Still, too many people are reliant on the Bank of Mum and Dad to fund huge deposits. While borrowing costs may be historically low, making mortgage repayments cheaper than monthly rent in many cases, getting a home bought in the first place is much more problematic.

The research found that 63% of people do not believe a home is affordable if it has to be purchased through Shared Ownership, so if the government is to meet its ambitious affordable housing targets by 2020 more will need to be done to make housing genuinely affordable, particularly for those workers that our major cities and towns are so reliant on to function.