ROOF Blog

Fifty years ago, the average home cost £2,507 and one in seven had the loo outside. A half century on, the average home costs £162,085 but spare a thought for the two in every 1,000 households that still rely on an outside loo, according to research published by Halifax. The decade-by-decade data paints a picture of Britain today more divided than ever by regional house price differences. Halifax found that the region with the lowest prices in 1960 – Yorkshire and Humberside – remains the lowest, but said that every region in Britain has fallen further and further behind London. It said the difference was down to the rise in real earnings, which have increased more in Greater London than in any other region. However, incomes have failed to keep pace with rampant property prices everywhere. Halifax found that prices rose by 273 per cent in real terms between 1959 and 2009. Over the same period, the growth in real earnings was 169 per cent.

Reckless lending to first-time buyers remains endemic in the financial services industry. An investigation by ROOF into the practices of leading banks and a mortgage broker found a worker with an income of £28,000 could borrow more than £153,000 from one high street bank. The repayments would have put an impossible financial squeeze on the buyer, bringing a serious risk of repossession. The amount the banks were prepared to lend in relation to the value of the property was also huge. Many offered an 85 per cent loan and one went up to 95 per cent. Kay Boycott of Shelter said, ‘With latest figures showing over 270,000 mortgages in arrears, it’s shocking to see banks continuing to lend to new borrowers based on such basic checks on their ability to pay. People are being encouraged into home ownership that may not be sustainable and potentially unmanageable debt. There is absolutely no point in giving a mortgage to someone who cannot afford it - every day we see the human fall-out from the repossessions that often follow.’