Average house costs more than maximum mortgage for an average salary

According to a BBC report 92% of UK first time buyers cannot afford to buy a house. In 548 of the 597 main postal postal towns of the UK the price of an average house is greater than the mortgage a person on an average salary could hope to get.

People on lower incomes have long since been priced out of the housing market, now those on average (around 18,000 pounds) or good salaries are being squeezed out. Central government have been trying initiatives to provide affordable housing to 'essential workers' (nurses &c) but that has had little positive effect. It has been known for some time that people are lying to thier lenders to get a mortgage that will allow them to buy a house, so intense is the pressure to be a home owner. So long as house prices are allowed to rocket ever higher and out of control we're going to get stagflation and stagnation of the general economy as more and more of people's incomes are tied up in mortgage repayments and the resulting imobile lumps of brick, mortar and slate. Without a correction to the market we are likely set for another negative equity slump such as triggered the recession of the early 1990s.

So, what is the solution? Obviously a price crash isn't a good way out, nor do I think that traditional government tools, such as taxation, alone will work as a solution. Government need to get creative, literally:

• Stop large scale sales and stock transfers of council housing would be an ideal first step. Keep what social housing we have in public hands and public administration.
• Cleaning up derelict sites and replacing them with large tracts of affordable council housing to reduce demand and replace what has been sold.
• Limit sales of council housing to the tenants, no more speculative purchasers who just want to kick the tenants out and sell the housing on at a premium, and get the councils to plough some of that cash in to building new properties to replace those sold.
• Use taxation and subsidies to promote the building of low cost residential properties and deter people from buying second and third homes.
• Stem the flow of British jobs to overseas outsourcing companies.

The biggest, and hardest, change will be to reduce the stigma of renting. Perhaps giving tenants some of the rights and tax breaks enjoyed by homeowners will be a start?