Housing crisis needs a solution

Sep 20 2007 Liverpool Daily Post

THESE days, the major divisions in our society are not over class, race, or gender, but between those who own their own property and those who do not.

The lucky ones in the former category are, by and large, sitting pretty, watching the value of their home increase dramatically and using the equity in their property to fund their lifestyle.

Those in the latter category, meanwhile, are increasingly frozen out and excluded from this bonanza by issues of affordability caused by the explosion in house prices.

This continuing divergence is starkly illustrated by our story today, which show that average house prices in Merseyside are now almost nine times the typical wage. Wages in the region currently average just over £18,000, while property stands at almost £160,000.

It has led to a lack of first-time buyers which, according to economists and estate agents, is a major factor in the slowdown gripping the region.

A number of solutions have been put forward to try and address this widening affordability gap, such as the one we report today. This involves families in a deprived area of Liverpool putting in 500 hours of voluntary work into the construction of their home, in lieu of a costly cash deposit.

The Government’s solution, mean- while, is to build thousands of social houses and encourage builders to use cheaper technology to get round the problem.

Welcome though such schemes are, they still leave the impression that they barely scratch the surface of the wider problem. In particular, it means first- time buyers are faced with a stark lack of choice as to where they can afford to live, and face being corralled into social housing ghettoes which increase the divisions between the haves and have- nots in society.

Property is one of the few areas of the economy where rising prices are celeb- rated as a sign of a healthy economy. However, as the story we run today makes clear, for every winner under this system, there are many more losers.