Families that are living in the UK are some of the hardest hit by the economic climate and the difficult housing market. Due to this they are some of the worst off households in Europe. The housing charity, Shelter, has warned this is due to the high costs of running a home.
The Research
According to the latest research, it shows that 16.5 per cent of the population in the UK have to spend 40 per cent or more of their monthly earnings on running their homes. Shelter has said this is a reflection on the “deeply dysfunctional” housing market. This is one in six of people who are spending nearly half their income on rent, mortgage payments and utility bills.
The research also revealed that the UK has three times more people paying this high cost of running a home compared to France. In France only 5.2 per cent of the population are paying 40 per cent or more. According to the study which looked at 29 countries within Europe, there are only two countries that have a higher percentage of people paying at this rate; Denmark and Greece.
Surprisingly the study found that those countries who have been hit very hard by the economic downturn such as Spain, Italy and Portugal have a lower percentage than the UK. Here the numbers are: 11.2 per cent, 7.5 per cent and 4.2 per cent respectively.
The Problem
Shelter believes the problem of unaffordable homes is due to previous year’s easy access to mortgages. They believe this is what has forced house prices up.
The Chief Executive at Shelter, Campbell Robb, has said, “These figures are the evidence that the UK housing market is deeply dysfunctional. With so many families spending huge amounts of their income on their rent or mortgage, people will be making daily trade-offs between food bills, filling the car tank with petrol, and paying their housing costs.”
With many families having to spend so much on just living this could cause serious problems for the landlords. The worry is that the tenants will fall into arrears as they are struggling. This will leave landlords out of pocket and trying to claw back the money that is owed. A great way to be protected is to ensure you’re protected with landlord insurance. This can protect you against loss of rent.
The Solution
Grant Shapps, Housing Minister, has commented on the situation by saying, “This Government is pulling out all the stops to build the affordable homes this country needs – which is why Government and private sector are jointly investing over £19 million in an affordable housing programme set to exceed expectations and deliver 170,000 homes by 2015.”
He also added, “One of the most important things we’ve done is tackle the record deficit we inherited, which has prevented the need for rapid increases in interest rates which would have placed additional pressure on hard-pressed families.”