HOUSE PRICES IN 11 OF THE 14 AREAS IN THE WEST MIDLANDS STILL ABOVE AFFORDABILITY RANGE OF 4.5 TIMES AVERAGE EARNINGS

Herefordshire, Worcestershire and Solihull are the top areas in the region where house prices are still above affordability range says GMB

Average house prices in Herefordshire are £ £185,829 which is 6.4 times the average earnings for full time workers who live in the county. This is £55,734 above what average house prices would be if house prices in Herefordshire were 4.5 times average earnings in the area. Herefordshire is one of 11 areas in the West Midlands where house prices are above the long term affordability range of 4.5 times the average earnings of those who live in the area. The other place where house prices are 5 time or more the average earnings in the area is Worcestershire, Solihull, Shropshire, Warwickshire, Telford & Wrekin, Dudley and Staffordshire.

Average house prices in Stoke-on-Trent are £88,984 which is 3.8 times the average earnings of full time workers who live in the area. House prices in Sandwell and Coventry are already at the affordability range of 4.5 times average earnings of people living in the areas.

For the region as a whole house prices are 5 times average earnings in the region. For England and Wales house prices are 5.1 times average earnings. For Britain as a whole the GMB analysis looks at house prices and earnings in 199 areas. In 45 areas house prices are at or below the affordability range of 4.5 times average earnings. There are 127 areas where house prices are 5 times or more than average earnings in each area. In the other 27 areas house prices range between 4.5 and 5 times average earnings.

These figures come from a new analysis by GMB of official figures for house prices and earnings for 14 areas in the region (see Notes to Editors). Below is set out the figures for each area ranked from the areas of least affordability to greatest affordability.

HOUSE PRICES & AVERAGE EARNINGS FOR 14 AREAS IN THE WEST MIDLANDS REGION

Joe Morgan, GMB Regional Secretary, “This new analysis shows that house prices in the West Midland have yet to fall towards the affordability range as they have done in parts of other regions. In England and Wales as a whole average house prices need to adjust down by 11% to come into the affordability range although the figure is higher in some parts of the country. This is likely to happen by a combination of a fall in prices and erosion by inflation while wages catch up.

The irresponsibility of the bankers led to a credit boom that has now given way to the bankers’ recession. It is now clear the extent to which the house price bubble and the speculation in the oil and commodities markets has done serious damage to the UK economy.

The sooner house prices in the region return to their long term affordability range the better. The house price bubble has to unwind and that together with the decline in the price of oil, the cut in interest rates and the cut in the VAT rate should mean that there will be more money in the pockets of workers who are able to stay in their jobs. At that point there would be light at the end of the tunnel in this banker’s recession. It is not clear how far away that point is.”

Ends

Contact: Joe Morgan, GMB Regional Secretary on 07968 064465 or GMB Press Office: Steve Pryle on 07921 289880 or Rose Conroy on 07974 251823.

Notes to editors:

The figures are the latest available. The earnings figures are from the Annual Survey of Hours and Earnings, residential based – 2008 sourced from the Office of National Statistics. The house price figures are from the Land Registry House Price Index - November 2008 sourced from the Land Registry.