Middle class renters have doubled since 1995
Friday 05 August 2016
New research has revealed that 50 per cent of middle-class children are now being brought up in rented accommodation.
The Institute of Fiscal Finance (IFS) report shows home ownership among middle income families with children has fallen by nearly 20 percent in the last 20 years.
Since 1995, the number of middle-income families renting privately has jumped from 11 per cent to 27 per cent.
The IFS defines ‘middle-income’ as those families with an average household income of £30,000 after tax and benefits.
The study notes that this group has become richer than they were before thanks to the income-boosting help of benefits like child support.
Despite this, they have been unable to get their first foot on the property ladder because of rising property prices sparked by demand far outstripping supply in the UK, since the 1990s.
Government moves to help first-time buyers like the ‘Help to Buy’ scheme have failed to off-set the trend as nearly half (46 per cent) of three and four bedroom properties exceed its £250,000 cap (£450,000 for London).
Critics have blasted the policy and warn that it unfairly penalises people who want to start families – a claim supported by research from housing charity Shelter which suggests 22 per cent of couples will delay having children because they cannot afford a suitable family home.
Jonathan Cribb, an author of the IFS report, said: “In a number of ways, 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.
"Moreover, falls in homeownership have affected middle-income families much more than their high- or low-income counterparts. Homeowners enjoy far more security than renters which is why many parents would prefer to own their home.”
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