'Unbalanced economy' not helping North East young get on the property ladder

Under 24s in the North East are among the least likely in the country to have made it on to the property ladder, figures show

How to get on the property ladder
How to get on the property ladder

Young people in the North East are the least likely in the country to have made it on to the property ladder, with low wages being blamed for the region’s plight.

Official figures show that less than 500 under-24s in Newcastle have a mortgage, making it one of the lowest areas for property ownership among young people in the country.

Despite the city’s relatively low property prices, only 4.6% of young people in Newcastle have a mortgage compared to 23.2% in the Selby area of North Yorkshire.

Less than 10% of people in South Tyneside and Sunderland own their own home, with the figures only slightly higher elsewhere in the region.

Trade unions in the North East blame the region’s “unfair and unbalanced” economy for the difficulties young people are facing when buying a home.

Neil Foster, policy officer for the Northern TUC said: “It simply isn’t right that a young person in Mid-Sussex should be three times more likely to get on the housing ladder than someone from Newcastle.

“The combination of lower wages and limited family wealth to help with deposits is bound to seriously disadvantage young people in our region getting on the housing ladder.

“On average a full-time North East worker is paid £43 a week less than the British average and since 2010 they are a further £1,811 worse off in real terms. We need fairer pay that meets the cost of living and better quality jobs to remedy this.

“Trade unions are working hard for their members to tackle this but others need to play their part too. No-one should be held back by the region they live in.”

Newcastle-based Home Group, which specialises in building affordable homes, believes a shortage in homes being built is having a major knock-on effect on house prices.

The company’s chief executive, Mark Henderson said: “The UK needs 232,000 new homes to be built each year and yet for a variety of factors there are less than half actually being built. This creates chronic shortage of properties which impacts on house prices and rental costs.

“We need the Government to explore ways of building at scale to meet the demand and we have long advocated the creation of Housing Zones to really drive the development of large numbers of homes.

“Freeing up land, cutting planning bureaucracy and providing the right incentives to support development will deliver the homes people need in Newcastle and elsewhere in the country at an affordable level.”

The Government said more than 2,000 people nationally have put in offers on homes under the Help to Buy scheme, totalling £365m of new mortgage lending. No figures were available for the number of people given help in the North East.

On average households have asked to borrow around £155,000 for houses worth about £163,000, which is below the UK average price of £247,000.

Prime Minister David Cameron said: “Most Help to Buy applicants are first-time buyers, young and have a roughly average household income. This is all about helping hard-working people get on the first rung of the property ladder - and helping them get on in life.”

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