Yesterday the BBC reported that lower-income families are unable to afford housing in one-third of Britain, making these areas effectively ‘off limits’. The information was provided by the Resolution Foundation, which campaigns on behalf of low to middle-income families.
Most of southern England, particularly London and the South-East, is beyond the reach of less affluent households, both for buying and renting. Housing minister Mark Prisk was not impressed with the report, describing it as “factually flawed”, as it failed to take into account housing benefit.
He said, “It suggests that rents are soaring when in fact they have fallen in real terms. And it fails to recognise that housing benefit provides a safety net which ensures that up to a third of private properties in most areas are affordable to low-income families.”
The foundation’s minimum income standard assumes that, for instance, a couple with two children will need to spend £204.7 per week on essentials such as food, petrol and clothing. They say that there are no local authorities where a family taking home £22,000 a year can afford the rent on a two-bedroom property with the minimum left over unless they qualify for housing benefit. One in six areas of Britain are even beyond the reach of families with a net income of £28,000.
The BBC created a housing calculator based on residential property data from Hometrack that gives a quick view of housing costs for buying and renting across the country.
Vidhya Alakeson, co-author of the Resolution Foundation’s report, said, “The private rented sector is now, in large parts of the country, the most expensive form of housing.
“It is also the only option for most low to middle-income households, many of whom are faced with the unenviable choice of forgoing other essentials in order to pay for housing or living in overcrowded conditions to reduce their housing costs.”
According to the Royal Institute of Chartered Engineers (RICS), the average private renter is paying 28% of their gross income on housing costs, 10% more than owner-occupiers, who not only earn more, but are benefiting from low mortgage rates.
She continued, “Only an increase in the stock of housing for rent can improve the situation, and the government should make this a strategic priority. People should not have to choose between decent, affordable housing and other essentials in life such as clothing, food or furniture – yet that is increasingly what is happening as housing costs escalate.”
The housing minister says that the government aims to build 170,000 affordable homes by 2015 and a further 165,000 in the three years thereafter. It is intended that the Help To Buy scheme, announced by chancellor George Osborne in this year’s Budget, will help aspiring buyers get onto the property ladder.
Following hot on the heels of this report, BBC One is going to broadcast an hour-long documentary on the ‘generation rent’ phenomenon called ‘Meet the Landlords’ on Thursday at 10.35pm.
Among other things, the programme will be tackling the subject of arrears, looking at both sides of the renting equation. Paul Shamplina, of Landlord Action, who features in the documentary, said, “Over the years, our experience of professional bad tenants has been plentiful, often evicting the same tenant from more than one property.
“Whilst they are the minority, this type of tenant has the intention of preying on vulnerable landlords in order to live for free.
“They will seek out someone new to the market who is self-managing a property and who, out of financial desperation to avoid a void period, will accept a tenant with minimum referencing.
“However, more and more, we are also seeing situations where tenants have fallen on tough times and remain in properties out of desperation.
“The documentary seeks to underline this plethora of scenarios that ‘generation rent’ is creating by following landlords, both professional and amateur, in very different situations.”
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