Millions may be pushed into poverty by 2040
17/11/2014
Social policy charity the Joseph Rowntree foundation has released a report advising that the rising cost of private rents are on course to push thousands of people into poverty while adding billions of pounds onto the UK’s housing benefit bill.
Using detailed historic data to examine the relationship between housing and poverty, the report has found that the private rents in England are forecast to rise almost twice as fast as UK incomes. This would in turn push poverty rates amongst private renters up to 53% by 2040.
It also shows how the decline in social renting and the rise in private renting is likely to become more pronounced over the next few decades, leading to one in five people in the UK living in privately rented accommodation by 2040.
The report says that poverty levels in England can only be contained if housing supply nearly doubles to 200,000 homes a year by 2040; social rents do not move closer to market rates and rises are limited to 1 per cent over inflation; Housing Benefit meets a similar proportion of rent as in 2008; and occupancy patterns remain unchanged.
The charity says that if social rents continue to rise towards market rates, the cost of Housing Benefit could rise by 125% - adding £20bn to the current bill.
Its chief executive, Julia Unwin said:
"These stark findings are a wake-up call for political leaders. After decades of failing to build enough, those in power have a responsibility to act now to build more genuinely affordable homes.
"We need a clear strategy that builds the homes we need in the right places and avoids locking low income households out of affordable homes.
"This is about more than frustrated aspirations of home ownership from Generation Rent: the reality facing many people is a life below the poverty line because of the extortionate cost of keeping a roof over your head.
"Addressing the rising cost of housing is crucial to tackling the high levels of poverty in the UK."
Need financial advice?
If you are struggling with money, for whatever reason, or if you have any personal finance questions, then please contact our financial advisers. You can get in touch by asking a question online, call ing us on 0800 092 1245, or by arranging a visit.
Share this..
Related stories
Bovis Homes back on the growth path
While we still await definitive confirmation of an upturn in UK property market, despite signs from various housebuilders that the market has turned, Bovis Homes has today announced plans to scrap its interim dividend in 2009 amid " challenging trading conditions". However, the prospects for shareholders may not be as bad as the headline indicates with the company suggesting that funds saved would...
Read MoreStudents splash more cash on rent
Average rent rates for students in the UK have risen by seven per cent compared to last year, according to a new report by Accommodation for Students.Social housing website 24dash published the report findings showing that an average UK student would pay £60 per week for their digs in 2007, which is four pounds more than 2005. Yet this figure does not reflect the experience of all students, as re...
Read MoreBuy To Let Market Starts To Shine Again
Even though it seems unlikely that any sector would benefit from the ongoing financial difficulties associated with the property market there are signs that Buy To Let is back on the agenda again. The Royal Institution of Chartered Surveyors has announced that 23% of surveyors have reported increased yields on properties in the first quarter of 2008.
As more and more people are for...
Building 'not solution' to affordable housing issue
It has been claimed that the government's efforts to build more new homes in an effort to boost the number of first time buyers in the market will not succeed.A spokesperson for Firstrung has argued that the current building plans will not boost the number of first time buyers getting onto the property ladder because not enough low-cost, keyworker homes are going to be built."I don't think the pol...
Read MoreHouse prices fall in England and Wales
The average cost of a property in England and Wales fell by 0.1% during July to £158,700 with buyers deciding to sit on the sidelines for the time being. At a when time estate agents have reported a 1.3% drop in the number of new buyers showing interest in properties there has been a 3.6% increase in the number of properties for sale. As a consequence, many experts believe that downward pressure...
Read More