Resolution Foundation outlook
The Resolution Foundation’s Housing Outlook report is co-authored by Emily Fry, Felicia Odamtten, and Cara Pacitti and was originally published on resolutionfoundation.org. Cara Pacitti will be appearing as a speaker at THFC’s seminar in February, which will focus on supporting housing association staff and tenants through the cost of living crisis. For the full report, click here.
Over the past year, we have seen some of the most challenging conditions for living standards on record. Not only has the price of essentials such as food and fuel soared, but on top of this many households have also faced significant increases in their housing costs – either due to rising rents or increased mortgage payments linked to higher interest rates. In this first Housing Outlook of 2023, we examine how the cost of living crisis is impacting on working-age individuals’ ability to cope with their housing costs.
Drawing on our recent YouGov survey of 10,470 adults in the UK, we find that housing stress is being felt much more widely than during the height of Covid-19. Although the effects of the cost of living crisis are broad-based, they are particularly unequal across tenures. Mortgagors are feeling the effects of higher interest rates, but private and social renters are much more likely to report falling behind or struggling with their housing costs than those buying their own home. Moreover, worryingly high numbers of private and social renters report signs of material deprivation and are resorting to sometimes unsustainable strategies to manage their housing costs.
Government support for those struggling with housing costs today is more limited than during the pandemic. Although the levels of forbearance we saw in response to Covid-19 may not be appropriate today, there is still much that policy could do to ease housing stress. For example, private rents have surged in recent years while local housing allowance (LHA) rates have been frozen, suggesting a rebase is urgently required. Likewise, now is the time to make good on the promise of a pre-action protocol for private renters to ensure that tenants and landlords mediate where renters fall into arrears.