2013-07-15 08:27:41
The report comes from the Resolution Foundation, which campaigns on behalf of
low to middle-income families.
It says most of southern England is now beyond the reach of less affluent
households.
The housing minister said the report was "factually flawed" and failed to take
housing benefit into account.
With social housing usually unavailable and home ownership unaffordable for
many first-time buyers, renting privately is often the only option for
households on lower incomes.
A BBC housing calculator also identifies how renting a modest two-bedroom home
for less than 700 a month is almost impossible in London and much of the South
East. Modest is defined as having a rent below 75% of similar properties in the
area.
BBC housing calculator
Renting example
Lets you see where you can afford to live - and if it would it be cheaper to
rent or buy
Enter how many bedrooms, which end of the market and how much you want to pay
each month
As you move the payment slider, parts of the UK light up to show you where you
can afford
Based on pricing and rental data from residential property analysts Hometrack
BBC housing calculator
The Home Truths report identifies local authorities that are "affordable" for a
couple with a child requiring a two-bedroom property on a household income of
22,000 a year. Affordable is defined as a rent that is no more than 35% of net
household income.
On that basis, 125 of 376 local authorities in Britain (33%) are unaffordable
for less-affluent working families.
"The private rented sector is now, in large parts of the country, the most
expensive form of housing," says Vidhya Alakeson, of the Resolution Foundation.
"It is also the only option for most low to middle-income households, many of
whom are faced with the unenviable choice of forgoing other essentials in order
to pay for housing or living in overcrowded conditions to reduce their housing
costs."
Housing Minister Mark Prisk described the report as "alarmist" as it "suggests
rents are soaring when in fact they have fallen in real terms".
"And it fails to recognise that housing benefit provides a safety net which
ensures that up to a third of private properties in most areas are affordable
to low income families," he said.
The BBC housing calculator also allows users to see where they can afford to
buy a house. A deposit of 10,000 is only enough to buy a two-bedroom home in
41% of local authorities, because a deposit of at least 10% is needed to get a
mortgage.
With a deposit of 20,000, almost 30% of the country remains unaffordable,
including all of Greater London and much of the South East.
Housing Blue = affordable | white = not affordable | grey = no data
Line
Even with a 50,000 deposit, central London and areas to the south and west of
the capital remain unaffordable. Analysts suggest recent rises in UK house
prices have been driven by increases in London and the South East.
Cannot play media. You do not have the correct version of the flash player.
Download the correct version
Londoners say they spend half their salaries on rent
"Home ownership is out of reach for the vast majority of low to middle income
families because few have the savings needed for a deposit," says Ms Alakeson.
"While the crisis in London is well documented, there are affordability black
spots in almost all regions of the country."
The government recently announced a Help to Buy scheme, offering loans for
people moving into new-build homes worth up to 600,000. Another government
scheme to assist those buying new-builds and existing homes is due to come into
force next January. And shared ownership schemes provided through housing
associations are also available to some first-time buyers.
The housing minister said the government had put a range of measures in place
to create "a bigger and better private-rented sector", including the 1bn Build
to Rent fund and 10bn in loan guarantees to build new homes specifically for
private rent.
"And for those looking to buy, the numbers of towns which are affordable for
first-time buyers is at its highest since 2002, thanks to schemes like Help to
Buy which enable people to buy newly-built homes with a fraction of the deposit
they would normally require," he added.
However, there are concerns that without a significant increase in housing
supply, additional demand generated by such schemes will push up house prices,
exacerbating the problem of affordability.
Start Quote
Affordable is defined as a rent that is no more than 35% of net household
income
The latest figures show that in the year to last March, just over 108,000 new
homes were completed in England. But this is less than half the number needed
to meet demand.
Homelessness is on the rise with more than 55,000 households in temporary
accommodation in England - 10% higher than a year before. More than 1.8m
households are currently on the waiting list for social housing - a 60%
increase in the last 10 years.
The Mayor of London, Boris Johnson, has described the shortage of affordable
housing as "the gravest crisis the city faces".
In his plan for the capital, 2020 Vision, published last month, Mr Johnson
writes that high house prices have had "brutal consequences for many
Londoners".
"Fewer and fewer take out mortgages in the way that their parents did, because
they simply cannot afford the deposit," he says. "Rents are now punishingly
high, and pre-empt an ever growing proportion of your disposable income."
There are concerns that London is pricing out the key workers it needs to
function.
Cost to income ratio for a low income couple with one child
Private rent map
This map is for a couple with one child at the 35th percentile of the household
net income distribution, living in a two-bedroom property at the cheaper end of
the local housing market.
Source: Resolution Foundation analysis of Hometrack data 2012/13
Responding to the Resolution Foundation report, the chief executive of the
housing charity Shelter, Campbell Robb, said families were paying so much for
housing that "they're forced to choose between putting food on the table,
turning on the heating or paying their rent".
"Shared ownership schemes are one of the best ways to offer low-income families
an affordable place to live. We need to see more schemes that are affordable
for low-income families and that give them the stability and security that our
current rental market sadly doesn't provide."