Over the past few years, Britain has undergone a market transformation and boomed within the property sector. House prices within the capital especially seemed to have shot up overnight, enticing many home owners to sell their now million pound properties and retire to the countryside.
However, according to new findings published by the social policy charity, The Joseph Rowntree Foundation, by 2040 people who rent will twice as likely to be classed as below the poverty line than those who are home owners. They suggest recent property price increases and the lack of on increase to the average standard of living, will eventually amount to around six million private renters (50% of the private renters market) falling below the poverty line.
The charity outlined how they feel rental prices are to increase by 90%, an increase which would be twice as fast as the economy, pushing 50% of private renters below the poverty line. Although by 2040 those on social housing will reduce by 2.5 million, the charity portrayed an image of how a lack of houses being built, by the previous and the current government have attributed to a sense of backward momentum, resulting in an increase of families and individuals in desperate need of social housing. The charity continues by stating how “Housing Benefits could rise by 125% – adding £20bn to the current bill”.
In an interview with the BBC, 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.”
The findings concluded by forecasting how a shortage of social housing, and the slow rate in which new builds are being built will mean by 2040 one in five will be living in privately rented accommodation, an increase of around 3.4 million.
Without more houses being built, rental prices maintaining a slow increase and the average standard of living wage being reflective of the then economic growth, it seems on the current path, Britain may be looking at a difficult next few years.