JRF: Millions face poverty due to rising rents
Future generations face the prospect of poverty if action is not taken to address the soaring cost of private rents.The Joseph Rowntree Foundation (JRF) has revealed rents are set to rise twice as fast as incomes and are expected to be 90 per cent higher than at the start of the recession by 2040.Those who rent will be more than twice as likely to be living in poverty than homeowners, the organisation stated.One in five (10.6 million people) will be living in private rented homes, up from 7.2 million today, largely as a result of declining homeownership and a lack of new properties. Half of these people, 5.7 million, will be in poverty (a rise of 2.6 million).In addition, the cost of housing benefit is set to soar by 125 per cent by 2040 if social rents continue to rise towards market rates. This will add £20 billion to the current bill.Meanwhile, real median house prices for owners will increase by 57 per cent, reaching £263,000, while real household incomes will grow from £32,300 to £45,500. Some 35.3 million people will be home owners by 2040 - a reduction of 820,000 people from 2008.Julia Unwin, chief executive at JRF, said: "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."The organisation is urging the government and housing providers to formulate an action plan to address the housing crisis and tackle poverty.In order to achieve this, housing supply needs to double to more than 200,000 units a year, while social rents should continue to go up by inflation plus one per cent.There needs to be an end to the fall in the proportion of affordable social housing in the overall market and housing benefit should continue to support costs at similar levels.
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