Research: Who do ownership products risk leaving behind

By: Sara Mahmoud  Published: November 2016


Current government support for affordable housing is largely reserved for sub-market ownership schemes. This research represents the first in-depth look at the working privately renting households these products are likely to leave behind. It finds that differences between regions mean a one-size fits all approach to solving the housing crisis and boosting home ownership will not work.

Summary

Current government schemes designed to lower the cost of home ownership are inaccessible to nearly a third of working privately renting households due to their incomes. This risks leaving at least 830,000 households behind in private rented homes that are potentially expensive and unstable.

The incomes and circumstances of these households vary across England. Although around 40% of left behind households have all members working full-time in each region, the circumstances of the rest are considerably different depending on where they live. For example, these households in London and the South East have higher rates of self-employment, whilst a higher proportion of those in the North are single parents.

Moreover, an additional 20% of working privately renting families, or 475,000 households, are likely to be excluded from shared ownership due to not being able to save for a deposit. This means that shared ownership is likely to be within reach for only around half of working privately renting households.

Evidence of the strain of housing costs on the renting households left behind suggests that their aspirations could be better served by a rental product that is genuinely affordable to those on lower incomes. This could not only improve their financial resilience but could potentially help them to save for a deposit on a home. What is clear is that differences between regions mean a one-size fits all approach will not work.

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