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Population boom pushing West Midlands housing market to breaking point - Less than half the homes needed are being built each year, report shows

By Leek Post and Times  |  Posted: February 21, 2014

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THE housing shortage in the West Midlands is reaching critical levels as house building fails to keep pace with population growth and wages lag behind housing costs, according to a new report from the National Housing Federation.

Home Truths 2014: West Midlands warns that less than half (48per cent) of the homes needed just to house new households forming in the region are currently being built, with 17,800 new households expected to form each year up to 2021, but only 8,620 new homes built during 2012/131.

Overall the region built the third lowest number of new homes in England over the past year.

The shortage is making housing increasingly unaffordable in the West Midlands.

House prices soared 56 per cent between 2002 and 2012, with the average home now costing nearly nine times the average wage at £173,378.3

Rents in the region have risen even faster than house prices, increasing 61 per cent between 2002 and 20124 and set to rise another 39 per cent by 2020.

In some local authorities rents have risen around seven per cent in the last year alone.

The top ten local authorities where rents rose most between 2012 and 2013 are: Wychavon with a rent rise from year to Sept 2012 to year to Sept 2013 of 7.6per cent and average monthly rent (year to Sept 2013) of £720; Stratford-on-Avon with a rent rise from year to Sept 2012 to year to Sept 2013 of 6.8per cent and average monthly rent (year to Sept 2013) of £835; Walsall with a rent rise from year to Sept 2012 to year to Sept 2013 of 5.2per cent and average monthly rent (year to Sept 2013) of £508; Birmingham with a rent rise from year to Sept 2012 to year to Sept 2013 of 4.4per cent and average monthly rent (year to Sept 2013) of £565; Worcester with a rent rise from year to Sept 2012 to year to Sept 2013 of 3.3per cent and average monthly rent (year to Sept 2013) of £568; Staffordshire Moorlands with a rent rise from year to Sept 2012 to year to Sept 2013 of 3.0per cent and average monthly rent (year to Sept 2013) of £487; North Warwickshire with a rent rise from year to Sept 2012 to year to Sept 2013 of 2.9per cent and average monthly rent (year to Sept 2013) of £574; Telford and Wrekin UA with a rent rise from year to Sept 2012 to year to Sept 2013 of 2.6per cent and average monthly rent (year to Sept 2013) of £560; Rugby with a rent rise from year to Sept 2012 to year to Sept 2013 of 2.5per cent and average monthly rent (year to Sept 2013) of £578; Sandwell with a rent rise from year to Sept 2012 to year to Sept 2013 of 2.5per cent and average monthly rent (year to Sept 2013) of £500.

The Federation’s report also warns that rising housing costs are hitting the public purse.

In August 2013, 83,110 working people in the West Midlands were receiving housing benefit to help to keep the roof over their heads, a 97 per cent increase since 2009.

The Government currently spends £24 billion a year on Housing Benefit, much of which goes into the pockets of private landlords, when that money could be put towards building new affordable homes.

Home Truths 2014: West Midlands also reports that:

Numbers of homeless people living in temporary accommodation in the West Midlands rose 23 per cent over the last two years.

It costs £34,676 just to put down a deposit on the average home in the West Midlands.

Nearly 80 per cent of businesses surveyed across the country said a lack of affordable housing is stalling economic growth, with 70 per cent warning it would affect their ability to attract and keep workers.

Building more homes in the West Midlands would give the regional economy a major boost.

Every new home built brings £75,682 into the West Midlands and creates 1.8 jobs directly and in the wider regional economy.

Home Truths 2014: West Midlands is being launched in central Birmingham on Friday, February 21.

Birmingham Erdington MP Jack Dromey and National Housing Federation chief executive David Orr will be among the speakers at the event, with local politicians and representatives of the region’s Local Enterprise Partnerships attending to hear how they can help ease the housing crisis and support continuing economic growth in the region.

Gemma Duggan, West Midlands external affairs manager for the National Housing Federation, said: “High house prices, rising rents and comparatively low wages in the West Midlands are not only making life extremely difficult for people living and working in the region, but they are also affecting employers and businesses and risk holding back economic growth.

“We need Local Enterprise Partnerships to work with local councils, housing associations and others to take a strategic lead on getting more homes built at the right price in the right places, which will help revitalise communities and create jobs.

“Local people also have an important role to play. Those who want more housing in the West Midlands need to contact local councillors and say yes to homes.

“With more support, housing associations across the West Midlands can be real catalysts for change for local communities.

“They are in it for the long term and can actively drive forward a balanced economic recovery.”

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