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Friday, January 09, 2015

JRF predict a grim future for UK housing

The future is impossible to predict. Just look at the 'Back to The Future 2' vision of 2014. In it, Marty Mcfly was flying around on a hovver board whilst dodging 3D projections. Well that's clearly not happening.

So on to the Joseph Rowntree Foundation's vision of 2040. In their What will the housing market look like in 2040? report produced by Heriot-Watt University.

In it they predict that - 

• People who rent will be more than twice as likely to be living in poverty than homeowners.
• Private rents will rise by 90%, twice as fast as incomes. The average private rent today is £132 per week – it will be £250 per week in 2040 in real terms.
• One in five (10.6 million people) will be living in private rented homes, up from 7.2 million today. Half of these, 5.7 million, will be in poverty (a rise of 2.6 million).
• One in 10 will be living in social housing, down from the current figure of 8.2 million to 5.7 million in 2040. Social rents will increase 39% to reach £92.10 per week in real terms.
• If social rents continue to rise towards market rates, the cost of Housing Benefit could rise by 125% - adding £20 billion to the current bill.
• Real median house prices for owners will increase to £263,000, a rise of 57%. 35.3 million people will be home owners by 2040 (a reduction of 820,000 people from 2008). Real household incomes will grow from £32,300 to £45,500.

The JRF are calling the Government to make changes to policy to avoid this less than futuristic outcome by

•  Doubling new house building to more than 200,000 units a year.
• Restricting social rent increases to inflation plus 1%.
• Housing benefit continues to support housing costs at similar levels.
• Increase supply of affordable social housing.

The JRF's Chief Executive, Julia Unwin says: 

“These stark findings are a wake-up call for political leaders. After decades of failing to build enough, those in power have a responsibility to act now to build more genuinely affordable homes. Without that we are storing up trouble for the future – a price that will be paid by children starting school life this year. These high costs are bad for families, the economy and Government.

“We need a clear strategy that builds the homes we need in the right places and avoids locking low income households out of affordable homes. This is about more than frustrated aspirations of home ownership from Generation Rent: the reality facing many people is a life below the poverty line because of the extortionate cost of keeping a roof over your head. Addressing the rising cost of housing is crucial to tackling the high levels of poverty in the UK.”

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