How Affordable is Property for St Neots Average Working Families?

The answer is simple; we are not building enough properties. If the supply of new properties is limited and demand continues to soar with heightened ratings, i.e. one household becoming two, people living longer and continued immigration, this means the values of those existing properties continues to remain high and out of reach for a lot of people, especially the families that are struggling.

Looking at some recent statistics released by the Government, the ratio of the lower quartile house prices to lower quartile gross annual salaries in Huntingdonshire District Council has hit 9.15 to 1.

So, what does that mean exactly and why does it matter to St Neots landlords and homeowners?

Well, if we ordered every property in the Huntingdonshire District Council area by the value of those properties, the average value of the lower quartile properties (i.e. lowest 25%) would be £195,995. If we then did the same, and ordered everyone’s salary in the same council area, the average of the lowest quartile (lowest 25%), the average salary of the lowest 25% is £21,315 pa, thus dividing one with the other, we get the ratio of 9.15 to 1.

This meaning that the chances of a St Neots family being able to afford to buy their own home, even when it’s over nine times their annual salary, are unfortunately, very slim indeed. We aren’t discouraging you to buy your own home, however the recent affordability crisis of people wanting to buy their own home is causing big problems for property hunters. All of these facts are the unavoidable outcome of the decade on decade failure to build enough homes to keep up with the demand.

Nevertheless, improving affordability is not a case of just constructing more homes - the Huntingdonshire District Council needs to make sure more properties are not only built, but built in the right locations, at the right type and at the right price. This is to ensure the needs for these lower income working families are met, because at the moment, they presently have few options.

Looking at the historic nature of the ratio, it can clearly be seen in the graph below that this has been an issue since the early to mid 2000’s.

However, looking at the historic data, the data (showing the lower quartile of wage earners) used to be housed by the local authority instead of buying. However, the vast majority of council houses were sold off in the 1980’s, meaning there are much fewer council houses today to house this generation.

Many of the lower quartile working class families were given a lifeline to buy their own homes in middle 2000’s, with 100% mortgages, but the with the credit crunch in 2009, that rug (of 100% mortgages) was rudely pulled from under their feet. You see it is cheaper to buy than rent ... it’s the finding of the 5% deposit that is the challenging issue for these St Neots working class families. So unless the Government allow 100% mortgages back, the fact is, demand for rental properties will outstrip supply.

Huntingdonshire District Council could make certain residential building land for private rented development only, eliminating the opportunity of the land being bought to develop large executive homes, which do not solve the current problem.

Yet in the short term, all this means is demand for rental properties will continue to grow, keeping St Neots house prices high and St Neots rents high.