GMB calls for more social housing
Workers on average earnings in Scotland are priced out of the housing market in 21 out of 32 areas, according to the GMB trade union. Their new report shows current average house prices are up to 7.6 times average earnings, making it impossible for may to buy a home. Edinburgh workers face the toughest challenge.
In Scotland as a whole, the average house price in July 2016 was £143,711 which is 5.2 times the average full time earnings of £27,732. House prices are rising at a much faster pace than earnings with the house price to earnings ratio now 7.8 on average across the UK. Average house prices in Scotland increased by 3.4% in the year to July 2016.
The situation is most extreme in Edinburgh where average house prices (average £227,580) are 7.6 times average earnings (£30,033). 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 that a massive programme to build more houses, especially houses for rent, by the Local Authorities is absolutely essential in all parts of Scotland and has to get underway without delay. We have been talking about this problem for far too long, there can be no excuses for not providing housing to people that they can afford to live in on average wages.
“The decisions of the Thatcher government in the 1980’s to sell council housing stock, and not replace it, and to pay landlords housing benefit instead of providing social housing directly has been a huge and expensive mistake. 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”.
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