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Key message as Cotswold homes earn more than average workers

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Bromford Homes Head of Sales Alan Bradley advises first-time buyers as survey highlights growing affordability gap

MY HEART sank as I read the latest report that highlights the growing affordability gap for first-time buyers in the Cotswold area.

Those who live and/or work in this popular part of Gloucestershire face a stark and gloomy statistic − the average home here earned much more (in rising value) over two years than the average worker did in take-home pay.

It's a wider problem of course − and some of the London stats are mind-boggling − but keenly felt in Cirencester and the surrounding district.

In fact, Cotswold saw the biggest relative increase outside of London, the South-East and East of England, according to Halifax research which formed the basis of at least one major national newspaper report.

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Here are the Cotswold figures:

Average 2-year house price increase: £72,920
Average earnings over two years:       £41,698
Difference in house price vs earnings: £31,222

So, the average Cotswold home earned roughly 1.75 times as much as the average worker did. Or in other words, the affordability gap for first-time buyers here is growing − and at a rapid rate.

Now put yourself in the shoes of a singleton, couple couple or young family on average wages in this already pricy part of the property world. You want a home you can call your own but even if you save every spare penny for a deposit your dream could easily feel like it's getting further and further from your reach.

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That's why we have such a strong need for affordable homes like the ones Bromford is building at Akeman Court in historic Cirencester and at Woodlands in nearby Northleach − close to Cheltenham but still part of Cotswold district.

Once again, the numbers are crucial.

If you look at Northleach, where our development also includes rental homes that will be let by another part of Bromford, you can buy a new two-bed home through our affordable equity loan scheme for as little as £131,400* and your 5% deposit would be just £8,213 plus a 75% mortgage.

Or take a look at Akeman Court (pictured below), where you can buy one of seven spacious two-bed apartments for as little as £129,600** with equity loan and your 5% deposit would be just just £8,100 plus a 75% mortgage.

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These prices − especially the 5% deposits − really do make all the difference for local people who want to get on the property ladder.

They bring the dream of home ownership within reach and the monthly costs are equally affordable − often lower or at least no more expensive than it costs to rent a similar home from a private landlord.

So here we have two examples of how affordable homes can help to make the property dream come true for the hard-pressed first-time buyers here in the heart of the Cotswolds.

And, of course, it's only a year or so ago that we handed over the door keys to our 99th shared ownership homebuyer at Cirencester's Fortuna development.

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Looking at the bigger picture, we're on course to break our year-end target with more than 130 completed sales − shared ownership and equity loan − by March 31. And we plan to sell around 160 affordable homes across central England during 2015-16.

Each new affordable home makes a difference to someone and, as part of a social business that reinvests all profits into more homes and services for our customers, we're proud of that fact.

* Help to Buy equity loan allows you to buy at Woodlands for just 80% of the purchase price − or £131,400 for a two-bed house with a full market value of £164,250. You pay 5% deposit, or £8,213 − plus the monthly mortgage payments on what you borrow − with no interest on the other 20% for up to five years and no rent.

** Equity loan allows you to buy at Akeman Court for just 80% of the purchase price − or £129,600 for a two-bed apartment with a full market value of £162,000. You pay 5% deposit, or £8,100 − plus the monthly mortgage payments on what you borrow − with no interest on the other 20% for up to five years and no rent.

23 March 2015