Business

Rising housing costs will push millions into poverty

Media playback is unsupported on your device
Media captionJeremy Cooke takes a tour of a rented house in Hampshire

The rising cost of private rents will push future generations into poverty and add billions to the housing benefit bill, according to social policy charity the Joseph Rowntree Foundation.

The charity's report says that by 2040, people who rent will be more than twice as likely to be living in poverty than homeowners.

Joseph Rowntree expects rental costs to rise 90%, twice as fast as income.

Its chief executive says leaders should build more affordable housing.

In a statement, 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.

The charity predicts that by 2040, 2.5 million fewer people will be living in social housing.

It says six million private renters - that's half of all private renters- will be living in poverty.

'Frustrated'

Joseph Rowntree says that a lack of house building is at the heart of the potential worsening situation.

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.

Ms Unwin said: "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."

Its research forecasts that the shortage of social housing, and the slow pace of new-build homes means that by 2040 one in five people will live in private rented accommodation - a rise of 3.4 million.

Jeremy Cooke, UK Affairs Correspondent

Life for Charley Dugdale and her four year-old son Archie is not as it seems. Their Hampshire home looks fine from the outside. But step through the door and the smell of damp is overpowering.

There is mould everywhere, and as Archie shows us his bedroom he counts eight large patches of it on the ceiling.

Archie now sleeps in his Mum's bedroom where there is less mould, but where it still feels damp.

Meanwhile, downstairs in the kitchen, as soon as it rains, water is leaking through the window. Mould in the cupboards means all of the family's food can only be stored on the work surfaces.

Charley Dugdale is a single parent. She is a serving police officer. And so, in the damp front room of her home, a simple question. Why not move out?

"Because I can't afford to," she replies. " The cost of living has risen so steeply since I've lived here that the rental prices when I first moved into this home were affordable and realistic on my salary… now looking at the prices in the immediate area where my child is at school, I can't physically afford to move."

The Joseph Rowntree report offers little hope to four year-old Archie, or his mum Charley who says: "I don't know how he's going to afford his own home, I don't know how he's going to get a mortgage, I can't see him being any better off than I am."

Campbell Robb, Shelter's chief executive, says millions of families are being pushed to the brink by an expensive private rental market which for many offers only instability and uncertainty: "The only way to turn the tide on the housing crisis is for politicians to commit to building homes that are genuinely affordable for ordinary families.

"Despite the recent pledges by the three main parties, the danger is that more and more new housing that is termed 'affordable' is still too expensive for those on average incomes, let alone those already struggling to make ends meet."

It is generally agreed that the lack of housing is an issue which much be addressed. But some believe private landlords can help address the issue.

Alan Ward is chair of the residential Landlords Association. He was shocked when we showed him footage of where Young Archie is living down in Hampshire. He said its a landlord's responsibility to provide safe comfortable housing.

He believes small scale private landlords can help by building homes.

"We invest something in the order of £50bn a year in the private rented sector. We have created three million new homes in the last 26 years, but we could do better, we could do more."

Related Topics

More on this story

Related Internet links

The BBC is not responsible for the content of external Internet sites