Broken ceilings for property prices

House's Cleared on Chatsworth Road E5. Photograph: © Hackney Citizen

Property prices in Hackney are way past the point of being affordable for those on the borough’s average income, according to a new report.

The National Housing Federation, a body which represents over 1,200 housing associations in England and champions affordable housing solutions, has released a report which claims that “London is a first-class city with a third-class housing system,” and details the rise in house prices for each borough.

The average price of a house in Hackney in 2011 was £355,510, with the average income being £26,390. The gross annual income needed for a mortgage is £76,181, making owning a property increasingly unviable for most residents, especially for those seeking bigger family homes.

Rent has gone up in concordance with house prices in the borough, with private tenants having to spend more than 70 per cent of their income on housing – double the amount generally considered affordable. As rental prices soar, Hackney is becoming an increasingly attractive option for landlords, which makes the housing market even narrower for residents wishing to get a foot on the property ladder.

“Last year London was the only region in England to see house prices rise,” explains the report, “and as people were priced out of buying a home, high demand pushed private rents up a further 7 per cent.”

Hackney Council claims it is ‘well placed’ to deal with the upsurge in housing costs, and the borough boasts the third highest amount of rented housing association homes in the capital, with 22,206.

However, although money may be pouring into Hackney, this new wealth has not benefited those on lower incomes, who continue to be squeezed by the increase in demand for housing, driven in part by those moving in from beyond the borough.

Initiatives to provide more affordable housing in Hackney have been gaining traction recently, with first-time buyers flocking to the East London Affordable Homes Show in October, which showcased opportunities backed by the Government’s FirstBuy scheme, as well as shared ownership options in the borough.

Yet the National Housing Federation report comes as London’s councils contemplate moving families classified as homeless to accommodation outside of their boroughs, or even outside London, as the cost of housing them in the city becomes prohibitive even for Town Halls themselves.

Meanwhile, a new group called Digs is working to secure a better deal for tenants in Hackney, by campaigning against huge price increases and standing up to irresponsible or malicious landlords, alongside other organisations offering free legal and fiscal advice.

For more information about Digs go to hackneyrenters.org