HOUSING CRISIS? WHAT CRISIS?

19-04-2008

Amid all the doom and gloom about falling house prices, is there a good news story? Maybe. This week Shelter revealed how the years of property boom had penalised thousands of hard-working families in the West Midlands.

The charity’s annual Roof Affordability Index showed that house prices for first time buyers in the region have rocketed 180 per cent in a decade.

The index, seen as the most comprehensive yearly data on house affordability, shows the average first time property price in the West Midlands rose from £46,306 to £129,726, with house price to income ratios increasing from 1.60 to 2.84.

Although this has partially been offset by lower interest rates, the average monthly mortgage payment has still increased over the period from £265.38 to £673.36 - a rise of 154 per cent.

Meanwhile the average weekly income of working households in the West Midlands has risen just 58 per cent - from £556 to £878. This means, according to Shelter, that it is now 61 per cent harder for first time buyers in the West Midlands to secure a home than it was 10 years ago.

Shelter chief executive Adam Sampson said: "These new figures show in full the true and worsening situation first time buyers in the West Midlands find themselves in. Every year the gulf between what first time buyers can afford and the cost of housing is widening.

"Despite falling house prices, many lenders are increasing their mortgage rates, making an already desperate situation worse. It means there is a generation of young people and young families being locked out of the housing market without a hope of ever sharing in the asset wealth of the generation before."

The Stirrer’s regular Thursday night Birmingham Mail column suggested there could be as many winners as losers in the property price crash, and that we should stop describing it purely in negative terms (http://tinyurl.com/59fdsq).