Housing crisis blamed for stifling economy

The region has some of the highest rents outside of the south of England and research published today by the National Housing Federation has revealed that the affordable homes crisis is undermining the efforts of employers to bring in new staff.

The federation admitted companies may be forced to look towards re-locating overseas if they are unable to resolve the problems in recruitment. It estimated that at least 240,000 new homes are needed nationally each year to satiate demand, but less than half that number are being built.

The study found nearly four in five employers claimed the lack of affordable housing is stalling economic growth in local communities, with 70 per cent warning it would affect their ability to attract and keep workers.

Among the region’s businesses which have experienced problems is the Wensleydale Creamery in the town of Hawes in the Yorkshire Dales. The company has unveiled plans for a multi-million pound re-development of the factory site, but senior officials admitted the high price of accommodation has created major recruitment problems.

Human resources manager Lynn Peacock said: “We do struggle on occasions to retain staff due to the high costs of housing in rural North Yorkshire. Over the years we’ve had employees who have really found it difficult to find affordable accommodation locally, and as a result some are forced to move away.

“Wensleydale Creamery is an iconic brand, and we try to invest in our local community whenever possible. But the lack of affordable homes for rent and sale can make this more difficult.”

Figures from the National Housing Federation have revealed the scale of the challenge faced by many house-hunters, with a huge gulf between property prices and wages. The average cost of a property in the region is £155,303, while the average wage is just £19,474. Leeds ranks as the most expensive location to rent a property in the North and the Midlands while York comes in close behind, with annual costs sapping annual incomes by as much as £10,000.

The study published today involved questioning more than 1,000 managers across England, with 55 per cent claiming the availability of affordable housing would be important if they were moving to another area or expanding their business. A total of 78 per cent of employers admitted house prices are a problem in their local area, while more than 70 per cent agreed building more homes would help stimulate the economy and bring in more business. Nearly three in five – 58 per cent – said building more homes would help them recruit and retain staff.

National Housing Federation director Gill Payne said: “Our economic recovery is being held back because there aren’t enough homes in England today, and this lack of homes has pushed up prices and rents beyond people’s reach.

“As a result, businesses are finding it tough to attract workers and expand because many people can’t buy a home or would struggle to pay high rents. If things don’t change, employers will simply move – potentially out of the country – taking away desperately needed jobs. We need to build more homes that people can afford in the right places so that businesses can grow, take on local staff, inject new life into struggling communities and steer us out of this economic rut.”

Employers have urged local enterprise partnerships (LEPs) – the public-private partnerships charged with boosting economic growth and creating jobs – to ensure that affordable housing targets are a core aim in strategies.

A report published last year by the National Housing Federation found the average price of a home in England for a first-time buyer in 2012 was £173,185. But the figure is expected to have increased by 42 per cent to £245,165 by 2020.

Rents are set to rise by about six per cent a year as interest rates and house prices increase. It is predicted that private rents will be 32 per cent more than the current levels by 2018.