900,000 ‘forgotten households’

12 July 2010

A family

Low-cost home ownership is failing to reach hundreds of thousands of low-income households, leaving them to fall through the gap in Britain’s housing market, a new Shelter report reveals.

‘The forgotten households’ examines the effectiveness of publicly-funded low-cost home ownership schemes and questions whether they are successfully plugging the hole between renting and home ownership. Download a copy of the report (pdf) arrow

Over the past five years the schemes have received huge amounts of government subsidy and accounted for 42 per cent of all affordable housing built, yet the report reveals that at least 866,000 low-income households are unable to afford even the cheapest government schemes. At the same time, they do not claim housing benefit and cannot access social housing, so they aren’t receiving any state support for their housing needs.

The average wage of households accessing low-cost home ownership is between £28,000 and £32,000, significantly higher than the national average wage of £21,700 and completely out of reach for households earning an average of just £16,000 a year.

Shelter estimates that 8 per cent of current low-cost homeowners could afford to buy on the open market.

In a time of constrained public spending, Shelter is calling on government to refocus investment from low-cost home ownership towards delivering more social rented housing and raising standards in the private rented sector where excluded households live.

Shelter chief executive Campbell Robb said: ‘Given the huge scale of housing need in this country, it’s simply not acceptable that these schemes are excluding almost 900,000 low-income households while helping many who could clearly buy on their own.

‘In the current economic climate, it’s more important than ever that every penny invested in public housing schemes reaches those who need it most. If low-cost home ownership is not working, we cannot justify continued public investment at the expense of the social and private rented sectors.’

‘We hope this report will start a wide-ranging debate about options for reform of our housing market which will provide everyone in our society with a secure, decent and affordable home.’

Download 'The forgotten households' (pdf) arrow