Boston house prices five times higher than average wage
09-15-2014
By Boston Target
Boston house prices five times higher than average wage
First-time buyers have been dealt a blow after new figures revealed house prices in Boston now far outstrip wages.
The combination of the housing market recovery in the UK, and low wage growth since the recession, has left the town's first-time buyers struggling to get on the property ladder.
Boston, previously a traditionally accessible area for affordable housing, is now suffering with property prices now five times higher than the annual average salary.
The value of a home in Boston was 2.95 times salary in 1997, but has now increased to 5.53.
Boston Borough Councillor Mike Gilbert, portfolio for housing, insists the blend of differing markets in the town were responsible for the rise in housing prices.
He said: "Traditionally this part of Lincolnshire is low wage level with a highly casualised workforce, including migrants.
"These migrants are coming from Eastern Europe, they are not going home from the Midlands every night, so they need somewhere to live.
"As a result of that there has been a growth in private sector landlords with properties being bought up and being used like dormitories. That is having the effect of driving up the prices.
"Landlords can get a high rent with properties in the HMO (House in Multiple Occupation) market.
"The rents are high for those who want to rent. All these different markets are interlocked. But as a conservative I am reluctant to support any type of price vetting or fixing. It needs to be left to the market.
"We are making sure the properties we have on the market are of a sufficient standard and well maintained.
"What we don't want is landlords exploiting vulnerable and low paid employees. But there is not a lot you can do about private housing prices, they will find their own level."
According to a study by the Trade Union Congress, one in five local authorities were deemed "easily affordable" in 1997 with the cost of a home below three times earnings.
However, the Federation of National Trade Unions has found that this number has now reduced to just one area.
The study also revealed that 84 per cent of the UK now boast house prices at more than five times the local salary.
The eradication of cheap high value to income mortgages, the Bank of England has recently instructed banks to limit the proportion of home loans offered that are more than 4.5 times applicants' salaries, is set to force more prospective buyers to continue renting.
"The toxic combination of rising property prices and falling real wages has meant that local housing affordability remains a huge problem for millions of people across the country," said Frances O'Grady, the TUC General Secretary.
"We need an ambitious programme of home-building to get house prices back under control."