Do you rent? 33% of the UK now unaffordable to low income families!
The resolution foundation has conducted research on rent prices in the UK and what it has found is quite staggering. It reveals that lower income families have been priced out of the rental market in around 1/3 of the UK! It also found that private rents are more expensive than a repayment mortgage in around 1/2 of the UK, but doesn’t go on to say at what interest rates and whether deposit is included. I imagine this is true at the best market mortgage rate available now, but maybe not at what interest rate would be offered a low income family with bad credit.
With wages stagnating and unlikely to rise in the next 5 years in line with inflation, we are probably going to reach breaking point if nothing is done soon, this is going to become a serious problem if more houses are not built for low – middle income families. And with these families being squeezed left, right and centre through inflation of food, petrol, energy etc… Then they are extremely unlikely to be able to save up for a deposit for their own home and escape the rent cycle.
The study uses this as an example, a couple with one child who have a net annual income of £22,000. The study goes on to estimate that the family in question would be using over 35 per cent of their disposable income on rent in 125 of the 376 local authorities in the UK. That’s astounding!
Even if their net income reached £28,000 they would still be priced out of 1 in 6 areas of the UK
“Behind these figures are families across the country being crushed by the cost of their home. We see families paying out so much of their income each month that they’re forced to choose between putting food on the table, turning on the heating or paying their rent.” Says Campbell Robb, chief executive of Shelter.
Housing waiting lists continue to grow whilst ore and more people are being priced out of home ownership this creates unsustainable pressure of private rents as greedy landlords push up their prices knowing that there is more demand than supply and people have no other option. Yet the government has announced that is going to reduce what it had planned to spend on affordable housing, are the government that out of touch with what is going on in this country?
We need more affordable housing now, and lots of it, the people in this country on low income need to be in a position where the can negotiate down private rent due to low demand rather than the other way round.