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Rent 'unaffordable' In Third Of Uk

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http://www.bbc.co.uk/news/business-23273448

Rent 'unaffordable' for low-income families in third of UK

A third of Britain is effectively off-limits to lower-income working families because private rents are unaffordable, a new report claims.

The report comes from the Resolution Foundation, which campaigns on behalf of low to middle-income families.

It says most of southern England is now beyond the reach of less affluent households.

The housing minister said the report was "factually flawed" and failed to take housing benefit into account.

'Unenviable choice'

With social housing usually unavailable and home ownership unaffordable for many first-time buyers, renting privately is often the only option for households on lower incomes.

A BBC housing calculator also identifies how renting a modest two-bedroom home for less than £700 a month is almost impossible in London and much of the South East. Modest is defined as having a rent below 75% of similar properties in the area.

The Home Truths report identifies local authorities that are "affordable" for a couple with a child requiring a two-bedroom property on a household income of £22,000 a year. Affordable is defined as a rent that is no more than 35% of net household income.

On that basis, 125 of 376 local authorities in Britain (33%) are unaffordable for less-affluent working families.

"The private rented sector is now, in large parts of the country, the most expensive form of housing," says Vidhya Alakeson, of the Resolution Foundation.

"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."

Housing Minister Mark Prisk described the report as "alarmist" as it "suggests 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," he said.

The BBC housing calculator also allows users to see where they can afford to buy a house. A deposit of £10,000 is only enough to buy a two-bedroom home in 41% of local authorities, because a deposit of at least 10% is needed to get a mortgage.

With a deposit of £20,000, almost 30% of the country remains unaffordable, including all of Greater London and much of the South East.

Even with a £50,000 deposit, central London and areas to the south and west of the capital remain unaffordable. Analysts suggest recent rises in UK house prices have been driven by increases in London and the South East.

"Home ownership is out of reach for the vast majority of low to middle income families because few have the savings needed for a deposit," says Ms Alakeson. "While the crisis in London is well documented, there are affordability black spots in almost all regions of the country."

The government recently announced a Help to Buy scheme, offering loans for people moving into new-build homes worth up to £600,000. Another government scheme to assist those buying new-builds and existing homes is due to come into force next January. And shared ownership schemes provided through housing associations are also available to some first-time buyers.

The housing minister said the government had put a range of measures in place to create "a bigger and better private-rented sector", including the £1bn Build to Rent fund and £10bn in loan guarantees to build new homes specifically for private rent.

"And for those looking to buy, the numbers of towns which are affordable for first-time buyers is at its highest since 2002, thanks to schemes like Help to Buy which enable people to buy newly-built homes with a fraction of the deposit they would normally require," he added.

However, there are concerns that without a significant increase in housing supply, additional demand generated by such schemes will push up house prices, exacerbating the problem of affordability.

The latest figures show that in the year to last March, just over 108,000 new homes were completed in England. But this is less than half the number needed to meet demand.

Homelessness is on the rise with more than 55,000 households in temporary accommodation in England - 10% higher than a year before. More than 1.8m households are currently on the waiting list for social housing - a 60% increase in the last 10 years.

The Mayor of London, Boris Johnson, has described the shortage of affordable housing as "the gravest crisis the city faces".

In his plan for the capital, 2020 Vision, published last month, Mr Johnson writes that high house prices have had "brutal consequences for many Londoners".

"Fewer and fewer take out mortgages in the way that their parents did, because they simply cannot afford the deposit," he says. "Rents are now punishingly high, and pre-empt an ever growing proportion of your disposable income."

There are concerns that London is pricing out the key workers it needs to function.

Responding to the Resolution Foundation report, the chief executive of the housing charity Shelter, Campbell Robb, said families were paying so much for housing that "they're forced to choose between putting food on the table, turning on the heating or paying their rent".

"Shared ownership schemes are one of the best ways to offer low-income families an affordable place to live. We need to see more schemes that are affordable for low-income families and that give them the stability and security that our current rental market sadly doesn't provide."

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This isn't really news, it always has been, and why we have always needed some form of social housing, due to the cartel of land ownership and building in the UK, the market "price" finds a level which a third of the population struggle with.

The land owners used to accept social housing as they still got to rip off the other two thirds. Now they seem intent on ripping off everyone. Good luck with that.

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quote 'The housing minister said the report was "factually flawed" and failed to take housing benefit into account.' quote

so it is housing benefit that is making the rents affordable. Do they even think about what they are saying before opening mouth.

the taxpayers are subsidising the payment of rents that if the free market operated would be lower (i.e. affordable)

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I notice that the Government Minister's answer is that housing benefit makes everything OK.

That'll help enormously with reducing Goverment spending, won't it?

Also, he says "housing benefit ...ensures that up to a third of private properties in most areas are affordable to low income families". Most of Britain, perhaps. But excluding those very areas the report says are impossible to rent in, i.e. London and much of the South East.

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quote 'The housing minister said the report was "factually flawed" and failed to take housing benefit into account.' quote

so it is housing benefit that is making the rents affordable. Do they even think about what they are saying before opening mouth.

the taxpayers are subsidising the payment of rents that if the free market operated would be lower (i.e. affordable)

Nail on head.

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quote 'The housing minister said the report was "factually flawed" and failed to take housing benefit into account.' quote

That's a quote of the article, which is a rather suspect bit of spin.

Not a quote of the housing minister, who may be suspect for other reasons. <_<

so it is housing benefit that is making the rents affordable. Do they even think about what they are saying before opening mouth.

the taxpayers are subsidising the payment of rents that if the free market operated would be lower (i.e. affordable)

In the hypothetical free market there would be winners and losers. Government intervention has always taken some of the losers and made winners of them, leaving someone else to become the losers. But at least the new losers get the inestimable privilege of paying tax to support the government intervention that prices them out.

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quote 'The housing minister said the report was "factually flawed" and failed to take housing benefit into account.' quote

so it is housing benefit that is making the rents affordable. Do they even think about what they are saying before opening mouth.

the taxpayers are subsidising the payment of rents that if the free market operated would be lower (i.e. affordable)

+1

BBC Breakfast's EA expert's reason for this unaffordablity, the high cost of borrowing!

The thick woman interview said nothing.

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Simples....Although you would never get the BBC or the Government to admit it.

1. Wages to low.

2. Rents to high.

3. Market distorted beyond all recognition by taxpayer subsidy.

What a bloody box of spanners this Country has become...........

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We need a funding for renting scheme

....helping working renters, the renters that have to pay the full rent out of earned taxed income, ha! you are having a laugh.....they don't want you renting, they want you buying into debt.....renters can only help themselves by not giving in to excessive rent increases from greedy landlords....not all landlords are greedy, some are very generous and understanding.......might be wise to do a status enquiry, take up references on your landlord before renting. ;)

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They want living costs to keep on rising so more and more people are reliant on the state. When the state collapses due to debt, the masters and their friends move their wealth to the next safe haven.

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Simples....Although you would never get the BBC or the Government to admit it.

1. Wages to low.

2. Rents to high.

3. Market distorted beyond all recognition by taxpayer subsidy.

4. Market distorted by land and building cartels and false scarcity due to planning restraints

What a bloody box of spanners this Country has become...........

Just thought I'd correct that as with or without housing benefit the price would still be distorted. Its just that the solution used to be social housing. The government now favours subsidy via housing benefit which causes even more distortion!

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That's a quote of the article, which is a rather suspect bit of spin.

Not a quote of the housing minister, who may be suspect for other reasons. <_<

In the hypothetical free market there would be winners and losers. Government intervention has always taken some of the losers and made winners of them, leaving someone else to become the losers. But at least the new losers get the inestimable privilege of paying tax to support the government intervention that prices them out.

Given a (relatively ) fixed population and reasonable supply of land, there is no reason why the housing market has to have losers at all.. (Ok, some people may have longer commutes, or not have a spare bedroom). Doubly so outside the SE.

For instance, can you think of any sane reason why house prices in an average city (i.e. Leicester.) should be much above cost-to-build for anyone..?

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rents blah blah blah rents blah blah blah

raise wages

Oh no! That would ruin our international competitiveness, whereas increasing the share of the pie that rentiers take, doesn't of course. :lol::blink:

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rents blah blah blah rents blah blah blah

raise wages

Time to raise the rents.

Raising wages at this stage without addressing inequality seems like no more than another phase of bubble blowing. Increasing wages will just increase asset values, not unlike lowering interest rates or making credit easier to obtain,not make affor4ability greater. The people I see are infected by mania, any concession just fuels it (them) more.

Where is the structural change leading to general improvement?

Edited by SeeYouNextTuesday

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Negotiate.

If places are available, a deal can be struck. course, its likely you get your benefit reduced too?

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Something's a bit off - apparently I can't afford to rent in Streatham (looks out of window, scratches head).

Is it just me or, when you try to put in a monthly rental value for a 1-bed, does it say "please enter a value between 0 and 750"? :blink:

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Seems to be a lot of contradictions out there about rent levels. Just finished watching the Wright Stuff, and judging by the faces on the panel they are all landlords now looking at less free money :lol: Woman who they listed as being from "Fifeshire" :rolleyes: started to say "You should try living up in Edinburgh....." but he cut that off, and as my rent is £400 p.m in Edinburgh I would probably have disagreed with what she was about to say. It might have been about asking prices for "good" areas in Edinburgh, where mugs who bought into the bubble still think they are selling the finest and rarest of commodities :lol: And BTW anyone paying up to 3k a month for a flat in Clapham (As the WS seem to be claiming?) needs to see a head doctor straight away.

Edited by dances with sheeple

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I think the imputed rents within the GDP calculations are now unaffordable.

Actual rents, including most of London are still quite affordable.

I expect the benefit limits to start to reduce rents in London.

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The top-rated comment on the article:

1.

Steve

10 Hours ago

The effect of Maggie selling off the best of the council housing at knock down prices to buy votes and banning councils from using the cash to build more. She has a lot to answer for.

Do the people who parrot this line ever stop to think exactly who would now be living in those council houses if they hadn't been sold off? Somehow I doubt that the emtpy-nester baby boomers rattling around in their 3 and 4 bed council homes in central London would simply hand over the keys to the 20 and 30 somethings who are now desperate for housing. Reducing the amount of housing stock on the rental market would only increase prices even more.

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rents blah blah blah rents blah blah blah

raise wages

Raise the wages and they will raise the rents.....reduce the rents and that will create more jobs that can pay the rents........high rents kills work dead. ;)

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Seems to be a lot of contradictions out there about rent levels. Just finished watching the Wright Stuff, and judging by the faces on the panel they are all landlords now looking at less free money :lol: Woman who they listed as being from "Fifeshire" :rolleyes: started to say "You should try living up in Edinburgh....." but he cut that off, and as my rent is £400 p.m in Edinburgh I would probably have disagreed with what she was about to say. It might have been about asking prices for "good" areas in Edinburgh, where mugs who bought into the bubble still think they are selling the finest and rarest of commodities :lol: And BTW anyone paying up to 3k a month for a flat in Clapham (As the WS seem to be claiming?) needs to see a head doctor straight away.

What is the point of working in an area that pays higher wages for the same job, when after taxes, travel and the rent is paid you are worse off for it.....working for someone else's benefit.....working to make someone else rich. ;)

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  • 245 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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