CML urges the Welsh Assembly to tackle affordability crisis in Wales

Affordable housing is crucial to delivering an efficient and competitive Welsh economy, the Council of Mortgage Lenders said today at its annual conference in Cardiff.

In the third quarter of 2006, the number of first-time buyers slumped to the second lowest since 1991. Just 4,300 first-time buyers purchased a home between July and September, slightly more than the 4,200 in the same quarter last year. In the third quarter of 1991 - with the housing market firmly in recession - only 3,700 first-time buyers bought a home.

First-time buyers in Wales are now also paying the highest ever income multiples to get their first property - 3.15 times the average income in the third quarter of this year, compared to 3.13 in the second quarter, and 3 times in the same period in 2005. But first-time buyers throughout the UK are also paying higher income multiples, partly because of the long-term decline in borrowing costs. 

Addressing delegates at the conference, CML Cymru chairman Mick McGuire said:

"It is clear that affordability is the key issue in the Welsh housing market. With fewer numbers of first-time buyers managing to get on the property ladder, the CML urges the Welsh Assembly government to look at innovative ways of helping those people who want to become home-owners to do so. This could be done by encouraging low-cost home-ownership or by expanding the HomeBuy scheme."

Affordability for all buyers has became more challenging partly because of a shortage of homes being built. CML-commissioned research has found that Wales needs 8,600 new homes annually, and has a backlog of unmet demand estimated at around 33,000 homes.

Continuing, Mr McGuire said:

"Local planning constraints are not allowing enough properties to be built to meet demand, and it is simply not possible to get people into homes that do not exist. Leadership from the Welsh Assembly government is needed to address these planning issues. If we build the extra 33,000 homes Wales requires, it could generate an extra £4 billion to Welsh GDP while providing the housing people need."