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80% of homes 'unaffordable' for families

FEWER than one in five homes in England is affordable for a typical working family, housing charity Shelter revealed yesterday.

Just 17.9 per cent of 325,000 properties with two or more bedrooms surveyed were within the reach of households with children on the average local wage.

London came out worst, with just 86 homes — a shocking 0.3 per cent — within an average household’s price range.

But even in north-east England, which had the highest number of affordable properties, nearly two-thirds were unaffordable.

An affordable property was defined by whether a family would be able to put down an 18 per cent deposit and borrow no more than 3.4 times their annual income, in line with average figures from the Council of Mortgage Lenders.

The revelations come as a blow to Chancellor George Osborne’s controversial help to buy scheme, which underwrites people borrowing larger sums in order to get onto the property ladder.

Critics, including Lib Dem Business Secretary Vince Cable, say the wheeze encourages reckless lending and has further inflated Britain’s housing bubble, pushing house prices even further out of reach for most people.

Shelter chief executive Campbell Robb said: “When a family looking to buy their first home searches a whole town for a place to live and finds nothing they can afford it’s clear we’re not just facing a housing shortage any more — it’s a full-blown drought.

“As the pool of affordable properties shrinks ever smaller, thousands of people are being forced to wave goodbye to their dreams of a home of their own — even those who’ve been able to put aside a large deposit.”

Shelter says Britain needs to build 250,000 houses a year to cope with surging demand and has urged the government to make local authority borrowing easier in order to boost house-building.

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