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Column 18th April 2018

With house prices this high, how can we afford not to act?

According to an article in one of the local papers a couple of weeks ago, house prices in Oxfordshire have skyrocketed to 13 times the average annual income.

So how can we expect our key workers in schools, hospitals and nursing homes to be able to live here?

Central government defines ‘affordable first time buyer housing’ as being 5.3 to 5.6 times average salaries with a £20,000 deposit.

The Vale District Council presented a paper to their Scrutiny Committee in February to consider what is being done/could be done, to increase the number of houses for rent or sale that are truly affordable to the average working family or person.

In the paper they quoted government figures which show that for 2016, the average annual gross earnings of the lowest 25% in the Vale was £25,290 with the overall average level at £34,864.

They admitted that even the least expensive 2 bedroom homes for rent in the district are likely to be beyond the means of households in the lowest 25%. Those on average earnings are also likely to struggle with the cost of renting a modest 3 bedroom home.

They also suggest that for prospective purchasers on lower than average earnings, with a 10% deposit available to them, an open market home would need to be in the price range of £112,500 to £156,000 which is about half of the price of the cheapest new home.  

They go on to say that for some purchasers, the opportunity to buy a home through a Shared Ownership scheme, where initial shares can be between 25% and 75% of the market price, may provide a realistic option, but admit that this may still be out of reach for many people.

They conclude that direct intervention by the Council in acquiring land is likely to be one of the most effective means of promoting wider housing options, and the action plan within the Joint Housing Delivery Strategy sets out a ten-year plan for developing partnerships and progressing housing delivery that can supplement delivery by mainstream housebuilders.

Yet they say that unfortunately, the Vale does not currently have sufficient capital or revenue resources to enable them to become involved in direct delivery of affordable housing, in any meaningful way.

So no solution there then.

The developers say that they build houses to meet market demand but the demand here is actually for houses that the key people we rely on can afford to live in.


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