Nowhere left to go: five million low-income workers priced out of renting and buying

Carers, teaching assistants and nursery nurses are just some of the low-income workers overburdened by private rents and priced out of homeownership in almost every region of England, the National Housing Federation finds today.

31 March 2017

New analysis explores where in the country people in different jobs can afford to rent and buy in the face of spiralling housing costs. It shows how house prices in England more than doubled (+120%) between 2002 and 2016, while salaries only increased by 38% during the same period.

This widening gap highlights how disproportionate house prices have now become to earnings to England, especially for those working in low-income roles.

The report identifies three occupational groups (elementary workers, customer service workers and caring/leisure workers) whose experience of the housing market is characterised by a distinct lack of choice. Key findings include: 

  • There is now only one local authority in the whole of England (Burnley) where a low-income worker, such as a nursery nurse, could afford an average mortgage without spending more than five times their annual income
  • Across the country, house prices are around 12 times low-income workers’ salaries
  • In London and the South East, rent typically takes up more than 50% of low-income workers’ pay
  • There is no region at all where a low-income worker pays less than 30% of their income to rent privately.

In London, higher housing costs are typically matched by earnings for people on higher salaries but for low-income workers there is little regional variation. The average London home now costs well over 20 times the average salary of a postal worker, cleaner or hospital porter working in the capital.

There are around five million people in England working in the three lowest income occupational groups. This makes up between 20-30% of regional labour markets nationwide.

Housing associations are providing innovative solutions to tackle what the Government has described as ‘a broken housing market’, delivering vital new homes for affordable rent and shared ownership across the country.

They also offer the nation a seriously good deal when it comes to affordable and social housing. For every £1 that the taxpayer puts in, housing associations raise £6 to build new homes.

David Orr, Chief Executive at the National Housing Federation, said:

“This analysis makes for truly depressing reading. Low-income workers are left with fewer affordable options than ever even though their jobs are absolutely critical to local economies. Make no mistake, it is these people who are keeping our communities going.

“It is crucial that we create more choice for those who are just about managing in low paid jobs - the housing market is simply not working for people on low incomes.

“We know that the nation needs to get building again, but we need to think outside of just new homes for market rent and sale. Affordable rent, shared ownership and other innovative housing association products are the way to go.

“Housing associations are in a unique position to step up and deliver the types of homes which the nation, and low-income workers, need most.”

ENDS

Case study of how struggling single mum Dulcie moved into a brand-new affordable home in Hull:

Young mum and part-time cleaner Dulcie lacked choice in the housing market and was struggling to raise the funds for her own place to bring up her son.

“As a single parent, I wanted my mum nearby and my little boy to stay at his nursery but when I looked at moving out the costs of deposits and fees made it impossible on a part-time cleaning wage.

“Together Housing gave me advice on what support I could get and enabled us to move into this house. My boy has really settled in – all of his friends from nursery are nearby and my mum can help with babysitting. I never thought that I would be able to afford to move into a brand new house – I feel really lucky.”

Notes for Editors:

The National Housing Federation’s briefing paper on the affordability of housing for lower income workers is available to download here.

The three lowest paid occupations in England are the ‘care, leisure and other service occupations’ (£17,665 per annum), the ‘sales and customer services occupations’ (£18,262) and the ‘elementary occupations’ (£18,462).

These occupational groups include nursery nurses, farmers, hospital porters, postal workers and cleaners.

Other sources:

  • ASHE 2016 and VOA 2016 – latest data available
  • ONS/Land Registry – latest data available