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Last Updated: Sunday, 3 December 2006, 01:16 GMT
Young workers 'need housing help'
Homebuyers look at house
Prices rose sharply in east London, says the federation
More assistance is needed to help young employed people currently priced out of the housing market, a charity says.

Young people in employment are finding it increasingly difficult to buy homes within their local area, research by the Joseph Rowntree Foundation shows.

The study of British housing showed that in 51 areas, more than two in five households with workers aged 20 to 39 could afford to rent, but not buy.

The study showed access to housing was hardest in south-west England.

Furthermore, south-east England as a whole is almost as unaffordable as London, the foundation said.

And Scotland is considered to be the most affordable part of Britain.

Building on earlier studies produced annually since 2002, the report analyses the long-term trends in affordability within the housing market.

Regional and national housing market policy needs to review more critically the 'where' as well as the 'how' of policy interventions
Steve Wilcox, report author

It suggests that house-price to household-income ratios for working households has reached record levels.

According to the report's author, while lower interest rates softened the impact of higher house prices, mortgage cost to income ratios reached 1990 peak levels.

The study, which explores housing-market products covering every local authority area across Britain, also considers policies and strategies that may help working households access home ownership in some form.

Such methods include using various forms of shared ownership where a family cannot afford to buy outright, or moving to an adjacent area to increase affordability.

Prof Wilcox said: "Regional and national housing market policy needs to review more critically the 'where' as well as the 'how' of policy interventions.

"Moving to a cheaper area where a household can buy outright, rather than remaining in a more expensive area where the household can afford only shared ownership, may well be a better long-term strategy in terms of housing market choices over a lifetime."

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