40% of the UK's income spent on housing costs, the third highest in Europe

Posted: 19/07/2012

A report by the housing charity Shelter reveals that the UK is the third most expensive place to live in Europe in relation to housing costs, with more then 40% of household income being spent on living costs, rent or mortgage repayments. This makes Britons the third worst off in Europe when it comes to housing costs, behind Denmark and Greece.

In comparison, France has just 5.2% of the population unable to afford housing costs compared to three times that figure in the UK. People living in the UK are even worst off than those living in countries with more severe economic difficulties such as Italy, Portugal and Spain. The report reveals that Cyprus is the cheapest place to live in Europe with only 2.5% or 1 in 40 people unable to afford living costs.

Shelter has blamed the figures on the Government’s lack of housing investments which has lead to one in 6 people being overburdened with mortgage repayments, rent, utility bills, tax and service charges. According to the European Union Statistics on Income and Living Standards, the percentage of income that’s spent on housing costs exceeds 40%.

A mere 121,200 new houses were built in England in 2010 to 2011 compared to 132,000 in 2000 to 2001 and around 260,000 in the late 1960’s according to Government figures. This is an unacceptably low level when the 2007 Housing Green Paper set a target of 240,000 new houses to be built by 2016, which a spokeswoman for the Department for Communities and Local Government stated that this target will not be met and was ‘never going to be reached.’

The shortage of housing has caused house prices to rise and more people being forced into the private rental sector. A recent study by the English Housing Survey revealed that homeowners pay £7,436 on mortgage repayments compared to £8,320 paid by private renters on rents alone. On average, families in the UK are spending £6,760 on housing costs alone with £1,152 of that spent on energy bills according to the Department of Energy and Climate Change and this figure is set to rise thanks to the UK energy regulator, Ofgem.

Ofgem forced energy companies to simplify their tariff structures meaning that cheaper online offers were scrapped, adding 40% onto household’s energy bills. Ofgem also recently announced that they have a £22 billion scheme to upgrade the UK’s gas and electricity networks which will result in household bills rising by £7 next year and a massive £15 by 2021.

The future for the UK is not a bright one, even the current wet conditions are imitating the economy. I don’t know about you, but I’m moving to Cyrpus! Sizzling sunny summers and the cheapest living costs in Europe, what more can you ask for? Anyone coming with me?

Amanda McGovern, Pali Ltd
www.paliltd.com

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