Property becoming unaffordable for 100,000 households every year in England

Almost 100,000 households in England are being priced out of the property market each year because of a shortage of affordable homes to rent or buy, according to a report by property agent Savills.

The report, shared with The Guardian, found the number of households priced out of the market had risen from its previous projection in 2015 of 70,000 a year. This was in part because of a change in how housing need is assessed, but also due to rising prices and stagnant wage growth.

On Wednesday, Philip Hammond – Britain’s chancellor, or finance minister – reiterated a pledge to build 300,000 homes a year by the mid 2020s and unveiled a package of measures to support house building. Savills said one-third of those would need to be offered at below market prices to meet the growing need for affordable homes.

About 96,000 households are unable to afford homes at the market rate, either to buy or rent, Savills said, with the vast majority in London and the south. It said varying approaches were needed to address the shortfall in different parts of the country: low-cost rented homes were needed more in markets in which incomes were smaller, while a mixture of homes, including shared ownership, would help in more expensive areas.

In London, 20 per cent of the households affected had incomes above £35,000 (US$46,600), Savills said, while the same proportion earn less than £10,000.

Over the past three years, 55,000 fewer affordable homes have been built each year than were needed, the research found. Although 42,500 households in the capital required below market rate housing, only 8,800 affordable homes a year had been delivered. In the south outside London, 15,500 affordable homes a year were being built while 34,100 were needed.

Meanwhile, in the north of England, low incomes were locking out 9,600 households a year, with 8,900 homes being delivered.