POORER FAMILIES STRUGGLING ON ‘INEQUALITY STREET’
RISING property costs have increased inequality as the poorest families have borne the brunt of the housing crisis, according to a think-tank.
The Resolution Foundation urged political parties to recognise in their election pledges that tackling the housing crisis requires action to help lower-income families who have been at its sharp end in recent years.
It said that in 1980, the average family across the UK spent just 10p of every £1 of income on housing – but this has now doubled to 20p. Meanwhile the poorest families spent 15p of every £1 of income on housing. This has increased to 40p in every £1.
Higher social rents, more private renting and declining support from housing benefit have been a major living standards headwind for the poorest families over the past 15 years, the foundation said, wiping out 90% of all income gains since the early 2000s.
It made the 90% calculation by looking at how much average incomes have increased between 2002 and 2017 for families in the bottom fifth of the income distribution, compared with housing cost increases over the same period.
The research, titled Inequality Street, also highlighted the struggle to get on the property ladder for younger generations.
It said home ownership among young families (25 to 34-year-olds) has nearly halved since a peak reached in 1989 – from 50% to just 28%.
High house prices relative to family incomes mean it will remain harder for young families to save a deposit big enough to get on the housing ladder, the think-tank said.