Workers on average earnings can’t afford Capital homes

Property in Albert Drive, Burnside.
Property in Albert Drive, Burnside.
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WORKERS on average earnings are being priced out of the Capital’s housing market, a union has claimed.

A new report by the GMB union said the same was true in 21 out of Scotland’s 32 local authorities.

Advocates Close, Edinburgh

Advocates Close, Edinburgh

Across the country, the average house price in July this year was £143,711 – 5.2 times average full time earnings.

But in Edinburgh average house prices were 7.6 times average earnings.

A ratio of 4.5 times a borrower’s income is regarded as the maximum that banks and building societies will lend.

Gary Smith, GMB Scotland secretary, said: “These figures show a massive programme to build more houses, especially houses for rent by local authorities, is absolutely essential and has to get under way without delay.”

He said the decisions of the Thatcher government in the 1980s to sell council housing stock and not replace it, and to pay landlords housing benefit instead of providing social housing directly, had been huge and expensive mistakes.

“Last year, for example, £24 billion – £1.77bn in Scotland – was spent on housing benefit. If a fraction of that amount had been spent on social housing for rent, the strain on the tax payer would be less and people would have housing they can afford to live in.

“These mistakes need to be corrected without delay, fair and affordable housing is a basic aspiration for all.”