Thousands of North East families locked out of the housing ladder could own their own homes if the Government adopted a new drive of house building, a leading charity says.
Shelter has called for a significant expansion of shared ownership homes for a generation of “forgotten families” in the North East priced out of home ownership.
In a new report, the charity found that a large number of middle-income families earning between £20,000 and £40,000 could find themselves stuck on the first rung of the property ladder or facing the prospect of years of private renting.
The charity’s analysis of incomes and house prices showed that in the North East, the traditional market leaves more than one in five of families priced out of a family-sized home, even though the region has the most affordable homes, with the average price estimated at £99,718.
Shelter is now calling for a major new house building programme, saying that mortgage repayments on a shared ownership home in the North East would be affordable for 100% of families on low or middle incomes.
Shelter’s study reveals that the Government’s Help to Buy scheme - which offers loans so people can purchase new-build homes with a deposit of 5% - will still leave a large number priced out, with more than a third of families in the North East on low or average incomes still unable to afford the monthly mortgage repayments, even if they have the funds for a deposit.
Couple Ben and Lucy Watson were only able to move into their home in Doxford Park, Sunderland, after they joined housing company Gentoo’s Genie scheme, which gives people an opportunity of buying their own home without saving for a mortgage deposit.
Father-of-two Ben, 38, an IT solutions architect, said: “The figures do not surprise me. I have a well-paid job and I’m not on the breadline, yet it was practically impossible to get a mortgage.
“I can understand that if people are a middle-income family trying to save any money to buy a house is nigh on impossible. There needs to be schemes that allow people to pay money into something that allows them to get a property and build for the future.”
Shelter insists an investment of £12bn could build 600,000 new shared ownership homes.
Kay Boycott, director of campaigns and policy at Shelter, said: “We need to see a new generation of shared ownership for ordinary families in the North East who are locked out of social housing and priced out of home ownership. The reality is that soaring house prices mean that the traditional market is no longer working for ordinary people.
“Building the new shared ownership homes we desperately need is the only way to give thousands of families a stake in the stable home they want at a price they can afford.
“So far, years of piecemeal policies and an alphabet soup of confusing schemes have meant shared ownership has failed to reach its potential, leaving it nowhere close to meeting the needs of England’s forgotten families.
“But for the many young people in the North East who are desperate to do what generations have before them and find a stable home of their own, a national shared ownership programme is the bold solution we need.
“Every day, Shelter’s housing advisers see the consequences of our growing housing shortage, from those not knowing where they’ll sleep that night to families struggling to pay their rent or mortgage. However, shared ownership won’t work for everyone, and we need a mix of new homes, including desperately-needed new social housing.”
The Government said Shelter’s report fails to take into account the billions it is investing in the construction industry, which it claims will lead to the fastest rate of affordable house building for two decades, on top of the 19,000 shared ownership homes it has delivered over the past two years.
Housing minister Mark Prisk said: “This is just one part of a range of measures we’ve put in place to ensure anyone who works hard and wants to get on the housing ladder has support to do so.
“Additionally we are tackling the record deficit to help keep interest rates low and ensuring affordability for first-time buyers is at its most favourable level since 2003.
“As a result, the number of first-time buyers is at its highest level for six years.”