Rents ‘unaffordable’ for low-income families

Even a very modest rented home is beyond the reach of low-income households in 33 per cent of all local authority areas, says a new report from the Resolution Foundation think tank. It described the results of its research as 'alarming'.

The report uses independent housing market data to examine the situation of a couple with one child, and an annual net income of £22,000, to see where they can afford to live if they spend no more than 35 per cent of their net income on housing – a widely accepted definition of affordability.

Key findings

  • In 125 of the 376 local authorities in Britain studied (33 per cent), rental costs would eat up more than 35 per cent of the family’s net income, making them unaffordable to live in.
  • In 38 of the 376 areas (10 per cent) the rent would consume more than half of the family's net income.
  • For a working family on a very low income – one with an annual household income of £19,000 – almost half of Britain (49 per cent of all areas) is unaffordable to rent.
  • Even a middle-income couple (with one child and a median net income of £28,000) looking for a private rented property would find themselves priced out of one in six areas of Britain (59 of 376) using the same 35 per cent measure.
  • The picture becomes still bleaker when applying a different definition of affordability – the Minimum Income Standard, a basic standard of living as defined by members of the public. It was found there is nowhere in the country where it is possible for a family on £22,000 a year to pay rental costs (social housing or private sector) and still have enough money left for a decent minimum standard of living.

Source: Vidhya Alakeson and Giselle Cory, Home Truths: How Affordable Is Housing for Britain's Ordinary Working Families?, Resolution Foundation
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Publication date: 
Jul 15 2013