Teachers priced out of house market as property prices soar to 11 times earnings
11-02-2016
As the education secretary calls for a 1% cap on pay rises, new figures show how hard it is for teachers to buy a house across much of Britain
Teacher Andy Winter, unable to afford to buy a house, lives on a boat within a 30-minute commute of school. Photograph: Felix Clay for the Guardian
Donna Ferguson
ndy Winter, a media teacher from north London, has spent the last three years living on a boat. “It was the only home I could afford to buy,” he says. “I rented for 15 years, spending hundreds of thousands of pounds, but when I looked into buying a flat at the age of 34, I couldn’t afford it.”
The new one-bed flats that overlook his boat on Regent’s canal, in Hackney, east London, are on sale for about £300,000. That’s about 18 times Winter’s take-home pay. Renting one – especially one with a view of the canal – would cost him at least his entire salary. “A few years ago, my ex and I looked at buying in the cheapest area of east London, a 90-minute commute from my school. But we would have been £200 a month short of the mortgage on a one-bed flat. Alone, today, there’s no way I would be able to afford it.”
He bought his 8ft-wide narrowboat for £10,000, with a £2,500 deposit and a £7,500 mortgage. “I’d been renting since 1998. I was so sick of landlords – I wanted the security of my own place.”
Winter moves every two weeks to a new stretch of the canal making sure, during term-time at least, that he is within a 30-minute commute of his school in Redbridge, north-east London. “I’ve met quite a few teachers who live on boats. It gives you a unique perspective and there’s a wonderful sense of community on the canal.”
Many teachers in London, however, have no choice but to rent. Exclusive research for the Guardian from Journalistic.org reveals a primary or secondary school teacher on the average London teacher’s salary – £40,580 a year – would need to find at least a 63% deposit to fund the purchase of the average property in the capital, using a 25-year repayment mortgage. According to online estate agents HouseSimple, it would take teachers earning the average London salary more than 71 years to save up a 63% deposit, even if they managed to put aside 10% of their net salary every year.
The situation is not going to help with the current teacher recruitment and retention problems. Last week, government figures revealed that almost a third of those who began teaching in 2010 left the classroom within five years. Also last week the education secretary, Justine Greening, called for teachers’ pay rises to be capped at 1% for 2017-18, in spite of a recommendation by the School Teachers’ Review Body for significantly higher increases.
London teachers’ wages were not always so pitiful in relation to property prices. In 1997, the average home in the capital cost about 4.5 times the salary of a London teacher. However, latest figures from Halifax show the price of an average London property now stands at £458,000, more than 11 times the typical salary of a local teacher. And it’s not only in London.
“House prices have risen significantly more rapidly than teachers’ salaries over the past 20 years,” says Martin Ellis, housing economist at Halifax. “This has made it far more difficult for teachers to buy their own home in many parts of the country.”
Housing problems are most acute in the south-east and east of England, where teachers typically have to spend eight or nine times their salary to buy an average-priced property, and need to put down a deposit of between 48% and 56% of the purchase price to qualify for a mortgage. The research reveals how the UK housing market has divided teachers. In the north-east, north-west, Wales, Scotland and Yorkshire, an average-earning teacher can still – like London teachers 20 years ago – buy an average-priced local property for about 4.5 times their annual salary.
However, even in these regions, teachers are struggling to get on the property ladder. “It’s the deposit that’s the killer,” says 27-year-old Shaun Williams, an English supply teacher who lives in north Wales. “The monthly cost of the mortgage on the property we’d buy would be significantly less than our rent, but we have to put down a £15,000 deposit. I worry that we might never be able to buy or may still be renting by the time we are ready to have children. I’m not in teaching for the money, but I do feel there’s an unfair imbalance between what people in the public sector are paid and bankers and stockbrokers.”
Nearly half of England’s teachers plan to leave in next five years
In London, evidence suggests house prices are exacerbating the teaching shortage. In 2015, figures compiled by TeachVac teacher jobs site showed secondary schools in London advertised more posts than any other region last year: nearly seven for every four vacancies posted in the north-east, south-west, West Midlands and the north-west. A recent survey by the London branch of the National Union of Teachers (NUT) found three in five teachers under 35 cannot see themselves teaching in London in five years’ time, and nearly two-thirds of respondents cited the cost of living as the reason they were leaving. “The cost of rent is half of my monthly salary – add bills, food and petrol and I have nothing left,” said one. Another teacher said: “Salaries are little more than they were seven years ago but rent has doubled.”
This year, evidence suggests there is a particularly acute teaching shortage in Oxford, where research by Savills estate agents reveals a single teacher would be unable to afford 95% of homes for sale. In the first nine months of 2016, TeachVac data shows four state schools in Oxford advertised 44 vacancies – 11, on average, per school so far this year. Along with 60 vacancies in the city’s eight private schools, this represents 25% of the total secondary school teaching vacancies advertised in Oxfordshire.
TeachVac director John Howson believes the recruitment crisis will get worse unless wages rise. “There’s a big risk teaching standards will deteriorate – children don’t like uncertainty and posts may be filled by a procession of temporary teachers who are not properly qualified,” he says. If the government is not prepared to increase wages, he thinks it needs to provide headteachers with relocation packages when they move into more expensive areas, and offer middle-earning teachers in these areas a 50% deposit in return for 50% of the proceeds when their property is sold.
Schools, he suggests, should also try to encourage local people who may already be on the housing ladder to switch careers into teaching.
A spokesperson for the Department for Education says: “Building the homes this country needs is an absolute priority for this government, and we have set out the most ambitious housing programme in a generation, including doubling the affordable housing budget to £8bn for 400,000 more homes.”
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The DfE says the number of teachers entering classrooms outnumbers those who retire or leave, and that it is spending £1.3bn up to 2020 to attract new teachers. “The annual average salary for teachers in the UK is greater than the OECD average, and higher than many of Europe’s high-performing education systems like Finland, Norway or Sweden,” the spokesperson adds.
Martin Powell-Davies, NUT London regional secretary, says the problem is few teachers are able to access genuinely affordable housing schemes, and the government is still not investing enough in house building and social housing. “The government needs to intervene in the housing market – it’s absolutely urgent. Children need stability and they’re not going to get that if teacher turnover is so high.”
David Blanchflower, professor of economics at Dartmouth College, New Hampshire, and a former member of the Bank of England’s monetary policy committee, says the situation will not improve until the government accepts teachers’ pay matters. “We’ve seen a pay freeze in the public sector and on average, pay is now 5% below what it was in 2008 in real terms. When pay is low, high-quality teachers will go elsewhere.”
Raising teachers’ wages in areas where there is a staff shortage would solve the problem at a stroke, he says. “Teachers don’t feel valued, morale plummets, the best teachers leave and the rich buy their kids tutors. The poor are left behind.”