Private Rental the “Most Expensive Form of Housing”
The recently published ‘Home Truths’ report from the Resolution Foundation, which campaigns on behalf of low to middle-income families, suggests that a third of Britain is now effectively off-limit for low-income working families, because private rents are unaffordable. The report is based on average rental figures and divided into local authorities. Affordability is based on a couple with one child with a household income of £22,000. Affordable rent is defined as no more than 35% of net household income. On that basis, 125 of 376 local authorities (33%) are unaffordable.
Vidhya Alakeson of the Resolution Foundation said: “The private rental sector is now, in large parts of the country, the most expensive form of housing.” The housing minister, Mark Prisk, dismissed the report as “alarmist” and “fundamentally flawed” because it “suggests that rents are soaring when in fact they have fallen in real terms.” He also went on to say that it fails to take the “safety net” of housing benefit into account “which ensures that up to a third of private properties in most areas are affordable to low income families.”
There is little doubt that private landlords are cashing in on those that are unable to get onto a housing ladder, which remains difficult to get onto. Analysts suggest that, based on a deposit of at least 10%, a £10,000 deposit is only enough to secure a two-bedroom house in 41% of local authorities. Even with a deposit of £20,000, 30% of the country remains out of reach, including the whole of Greater London and most of the south east.
Although it didn’t resonate with the Government, which pointed to recent schemes designed to help people into the housing market, such as Help to Buy, the Resolution Foundation report clearly struck a chord with Campbell Rob, the chief executive of the housing charity shelter. He said that families were paying so much for housing that they were “forced to choose between putting food on the table, turning on the heating or paying the rent.”
Sources: bbc.co.uk, resolution foundation.org