Research carried out by the Institute for Fiscal Studies (IFS) shows that 50% of middle-class children are now caught up in rental accommodation. They are being brought up in rented housing because rising property prices mean couples are being forced to start families before they can afford to buy their first home.
The research shows a sharp reduction in home ownership among middle-income families with children, over the past two decades. The proportion of families owning homes has fallen by a fifth from 69 to 50 per cent since 1995.
Over this same period the number of middle-income families living in private rented housing has more than doubled, and has risen in proportion from 11 to 27 per cent.
The IFS defines middle-income families as having an average household income of £30,000, and says that millions more children of “comparably affluent parents” are growing up in surroundings which are more likely to be “cramped, damp and dangerous”, and with the added possibility that they could be “evicted at any time with two months’ notice”.
This, says the IFS, is despite middle-income families, which after tax and benefits, are becoming richer than they were before the financial crisis. This is said to be partly as a result of their income being boosted by more generous benefits, such as child support.
The increasing number of families joining “Generation Rent” is said to be because their incomes have been “far outstripped by housing costs” due to an increase in demand, and a decline in the increase in supply of housing, which has been a trend since the Nineties.
The Government is attempting to counteract this effect by creating policies to help people get on the property ladder, in particular its “Help to Buy” Isa, and other help-to-buy schemes, but recent research for The Daily Telegraph by property website Rightmove is showing that 46 per cent of three and four-bedroom homes across the UK exceed the Help-to-Buy Isa’s maximum purchase cap of £250,000, or 450,000 for London.
Jonathan Cribb, an author of the IFS report, said:
“Middle-income children are more similar to low-income children than they were 20 years ago. This is partly due to higher income growth for poor families with children, driven by falls in worklessness. Falls in home-ownership have affected middle-income families much more than their high or low-income counterparts.”
More middle class renting https://t.co/4bZmK989HD
— LandlordZONE (@LandlordZONE) July 21, 2016