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The unaffordability of home ownership is tough on families. But if a major city lacks for affordable housing Cheap Zach LaVine Jersey , it can also negatively impact overall development.



Is it possible to read a British newspaper or UK land investment or real estate website without running into a story about the shortage of housing? If supply is so short, why aren鈥檛 homebuilders responding with new homes?



In fact, discussions about the supply of housing in the UK - in London, as well as the rest of the country - are really about affordability. Currently, the woefully inadequate supply intersects with the demand line at a very high point Cheap Jimmy Butler Jersey , driving the costs of an owneroccupied home beyond the reach of the average English worker.



Investors (think about people investing in UK land), economists and local planning authorities alike have closely studied this factor. And the most meaningful number that surfaced in late 2014 and early 2015 is the average home price-to-earnings ratio, hovering just above 5.0. As home prices rise, as they have rather rapidly since the country emerged from the financial crises of 2008-2010, the ratio gets larger if wages do not keep pace.



And wages have not kept pace. The BBC reported in January 2015 that average weekly earnings increased in 2014 by 1.6 per cent per annum Wholesale Minnesota Timberwolves Jerseys , while house price increases were 7.8 per cent.



Now to be fair this ratio is not at historically high levels. It was higher (around 5.75) in 2007, the height of the last housing price bubble. Then it dropped to below 4.5 after the bubble burst in 2008, where the ratio largely remained up through mid-2013.



Nationwide, the financial services company, breaks down the numbers that distinguish London proper Wholesale Timberwolves Jerseys , the north of England and the UK overall. For first time buyers, that price-to-earnings ratio is much higher in the Capital City (around 6.8) and below average (3.2) compared to the country averages.



Keeping overall home ownership somewhat in check is the relatively low cost of mortgages, aided in part by the Help to Buy scheme sponsored by the Government.



So why aren鈥檛 homebuilders and land investors building more? With low interest rates on mortgages, wouldn鈥檛 that be incentive enough to build? This isn鈥檛 the easiest equation to work out as there are several variables. One is that the 10 per cent average deposit is difficult to muster for cash-strapped younger families. Another is that so much of the population and employers are clustered in London, where housing and land costs are high. And another is that homebuilders depend on capital growth partners to first buy the land Cheap Minnesota Timberwolves Jerseys , then get planning authority approvals to convert that land to residential housing 鈥?but that several factors can trip up that process from converting land capital into built properties.



The cities with the lowest home price-to-earnings ratio, where homes are more affordable (in 2012 numbers) were found by a study from PwC consultancy and Demos think tank (鈥淕ood Growth for Cities, a report on urban economic wellness鈥? to be the following:

Liverpool - Also distinguished by a good work-life balance.


Manchester - Work-life balance and overall income distribution are favourable here.


Newcastle - Also distinguished for good transport factors.


Sheffield - At best, Sheffield hits at 鈥渁verage鈥?for a number of factors including work-life and sectoral balance, homeowner occupation rates and income distribution.


Unfortunately Cheap Timberwolves Jerseys , each of these cities is not poised for growth due to poor jobs, wages, health and other factors. In each case, less than favourable conditions kept demand and prices for homes low.



Cities most noted in the PwCDemos study for high house-price-to-earnings ratios - and on the radar screen for investors in land, hoping for capital growth - are Birmingham Wholesale Anthony Brown Jersey , Bristol, Leeds, Nottingham and London.



Myriad factors affect homebuilding, of course, and investors are cautioned to go about it with good resources. In addition to meeting with land fund partners Wholesale Taj Gibson Jersey , would-be investors should speak with an independent financial advisor to determine the proper balance of risk to reward in this class of investments.



The lack of houses, stymying growth in many UK cities, is not due to a lack of investors. It鈥檚 more linked to wages that fail to enable ownership.

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