House prices in Mansfield are no longer affordable, according to new figures released this week - with homes now costing more than five times an average salary.
However, over the last 16 years house prices have outstripped wages across the region. Only ten local authority areas (24 per cent) now have house prices that are less than five times the average local salary.
According to figures released by the TUC, the cost of buying a house in fewer than a quarter (24 per cent) of local authority areas in the East Midlands can now be classed as affordable for local people,
The analysis of average salaries and house prices by local authority area shows that in 1997 the average house price in the vast majority of local authority areas across the region was less than five times the average worker’s salary, the TUC said.
Only one local authority area in 1997 – Rutland – had a housing to wage ratio above five – a level which the TUC believes puts home ownership out of reach of local people, particularly if they only have one salary.
In Mansfield, the average home now comes in at 5.11 times an average salary for the area, compared to 3.01 times in 1997, while other neighbouring areas are still below the ‘five ratio.
In Ashfield, an average home costs 4.8 times average salary, compared to 2.73 times in 1997, while prices in Bolsover are currently 4.18 times average salary, compared to 2.7 times in 1997.
The affordability ratio of five is particularly significant, says the TUC, as the Bank of England has recently instructed banks to limit the proportion of mortgages they offer that are more than 4.5 times applicants’ salaries.
In 2013, Rutland was still the most unaffordable area with an affordability ratio of 9 (just as it had been in 1997). Derby was the most affordable area in 2013, whereas in 1997 it had been Lincoln.
TUC regional secretary Lee Barron said: “The East Midlands has always had its blackspots in terms of housing affordability, but by and large houses and flats in most parts of the region were within reach of local people.
“Over the last 16 years, house price rises have outstripped people’s pay packets and left huge swathes of the region unaffordable. Last year, house prices in most local areas were more than five times the average local salary.
“We need to build more homes to get house prices back under control. With interest rates low, now is the perfect time for an ambitious programme of home-building, which would also help tackle local unemployment problems.
“But as more people give up on buying a home or decide they don’t want to get on the housing ladder, we need a better deal for renters so that they don’t get clobbered by soaring rents too.
“Housing affordability isn’t just about house prices though. Decent wages are just as important and there is a lot of ground to make up before we return to the kind of salaries that people were earning before the crash.”
Last week Chad reported how council planners had heavily criticised the long-awaited blueprints for 151 homes in Pleasley Hill, claiming they ‘smack of desperation’, before giving their seal of approval.
The application to build the houses on the site once occupied by derelict terraced homes was put before Mansfield District Council at their recent monthly meeting.
The council has been eager to press ahead with the multi-million pound plans on the vacant site for a number of years regarding it as an important gateway to Mansfield.
But after being presented to the planning committee, the plans were lambasted by a number of councillors, most notably Coun Christine Smith who labelled the layout as a ‘disgrace’.
She said: ““It has been on the agenda for donkeys years but this smacks of desperation. It’s quite appalling. There are so many things wrong with it that I’m very disappointed.
“Quite frankly, it’s a disgrace.”
The decision to bulldoze rows of old colliery homes on the Chesterfield Road North site was taken in 2004, but it took another nine years to clear the site.
The houses had stood for more than 120 years but had fallen into serious disrepair.
Persimmon Homes is behind the new development which will see 151 homes, including 12 apartments, built in clusters and arranged around shared courtyards.
There will a mixture of mainly three-bed and two-bed homes, with a small number of four bedroom houses.
In total, 31 homes will be deemed as ‘affordable housing’.
Meanwhile, in Ashfield, council leaders have pledged to build more affordable housing in the district.
At a meeting held last year, councillors passed plans to enable more people to get on the housing ladder.
Speaking at the meeting Chris Baron, leader of the Ashfield District Council, said something needed to be done to ensure houses were available for more than 4,000 people on Ashfield’s waiting list.
He said: “We are not building enough council and affordable homes.
“The average price in the Ashfield area is now £110,000 with the average earnings now £21,070.
“As with most businesses when there is a shortage, as the demand goes up so does the price.”