At first glance the Newcastle area is still relatively ‘affordable’ to buyers compared to the rest of England and Wales.
In 2015 The Guardian published an interactive map showing the relative affordability of different parts of England and Wales at 2014 wage levels and house prices.
Although someone on average earnings of £26,500 seeking to buy a house at the median (middle when ranked) house price would find 91% of England and Wales beyond their means in 2014, they would have more options in the Newcastle area.
However, take a closer look and you will find areas with NE3 (Gosforth and Kingston Park), NE2 (central area including Jesmond), NE7 (High Heaton) and NE13 (much of the Great Park and Dinnington) postcodes are more or less outside that price range. A buyer would need over six times an average salary to buy a median house there and would need an annual income of £44,000 to £50,000. In 1998-2000 median priced houses in these areas were within reach for people on average incomes.
In the more ‘affordable’ parts of the city, such as NE4 (West end), NE6 (Heaton and Byker), NE5 (Callerton) and NE14 (stretching out to Throckley) an average earner would still have found it tricky to buy a median priced house in 2014 because this really required a salary in the £28,000 to £30,000 range.
Of course average figures across postcode areas will obscure variations in pockets within these areas. Also, by definition half of the houses for sale are likely to be below the median price, so an average earner could find something to buy. It just won’t be what a similar person might have been able to buy 15 to 20 years ago.
This has long-term consequences for everyone including, when coupled with a decline in council-owned stock for rent, eventually a major shift in tenure back to levels of private renting that existed before the First World War (a period of major housing supply crisis). The housing charity Shelter has warned that only 20 per cent of those in the 25-34 age group will be able to own a home in 2020 compared to 60 per cent in 2005 if things continue as they are.
Explore for yourself by feeding in postcodes at: http://www.theguardian.com/society/ng-interactive/2015/sep/02/unaffordable-country-where-can-you-afford-to-buy-a-house