The Problem of the Rent and the Problem of the Mortgage

Nicholas Pleace

The Problem of the Rent and the Problem of the Mortgage

Research output: Other contribution

Abstract

The Resolution Foundation estimates some £12bn in additional mortgage debt has resulted from interest rate rises, with around two-thirds of that still waiting to be passed on to mortgage holders, as their fixed rate deals end, in May 2023. Last Autumn, the Joseph Rowntree Foundation estimated 120,000 households (400,000 people) will be pulled into poverty by mortgage interest rate rises, alongside 750,000 households with a mortgage already in poverty. Finding that average of an extra £2,300 a year for the mortgage will mean more people experiencing net negative incomes, i.e. never having enough to meet basic living costs including housing, fuel and food. The problem of the rent, as Beveridge put it, was the most intractable challenge when (re)creating the British welfare state in 1942. The problem of the rent (and mortgage) then, as now, was that housing spending cannot vary, unlike food or energy costs. If renting privately or buying, the UK’s welfare systems and generally low wages mean that poorer households often cannot ‘trade down’ - they are often already occupying the only housing they can afford – while social housing waits are very long indeed.

Original language	English
Type	Blog
Media of output	Web
Publisher	The York Policy Engine/University of York
Publication status	Published - 13 Jun 2023

Keywords

Homelessness
Cost of living crisis

Access to Document

https://www.york.ac.uk/policy-engine/cost-of-living/news-and-blogs/2023/blogtheproblemoftherent/Licence: Other

Cite this

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title = "The Problem of the Rent and the Problem of the Mortgage",

abstract = "The Resolution Foundation estimates some £12bn in additional mortgage debt has resulted from interest rate rises, with around two-thirds of that still waiting to be passed on to mortgage holders, as their fixed rate deals end, in May 2023. Last Autumn, the Joseph Rowntree Foundation estimated 120,000 households (400,000 people) will be pulled into poverty by mortgage interest rate rises, alongside 750,000 households with a mortgage already in poverty. Finding that average of an extra £2,300 a year for the mortgage will mean more people experiencing net negative incomes, i.e. never having enough to meet basic living costs including housing, fuel and food. The problem of the rent, as Beveridge put it, was the most intractable challenge when (re)creating the British welfare state in 1942. The problem of the rent (and mortgage) then, as now, was that housing spending cannot vary, unlike food or energy costs. If renting privately or buying, the UK{\textquoteright}s welfare systems and generally low wages mean that poorer households often cannot {\textquoteleft}trade down{\textquoteright} - they are often already occupying the only housing they can afford – while social housing waits are very long indeed. ",

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N2 - The Resolution Foundation estimates some £12bn in additional mortgage debt has resulted from interest rate rises, with around two-thirds of that still waiting to be passed on to mortgage holders, as their fixed rate deals end, in May 2023. Last Autumn, the Joseph Rowntree Foundation estimated 120,000 households (400,000 people) will be pulled into poverty by mortgage interest rate rises, alongside 750,000 households with a mortgage already in poverty. Finding that average of an extra £2,300 a year for the mortgage will mean more people experiencing net negative incomes, i.e. never having enough to meet basic living costs including housing, fuel and food. The problem of the rent, as Beveridge put it, was the most intractable challenge when (re)creating the British welfare state in 1942. The problem of the rent (and mortgage) then, as now, was that housing spending cannot vary, unlike food or energy costs. If renting privately or buying, the UK’s welfare systems and generally low wages mean that poorer households often cannot ‘trade down’ - they are often already occupying the only housing they can afford – while social housing waits are very long indeed.

AB - The Resolution Foundation estimates some £12bn in additional mortgage debt has resulted from interest rate rises, with around two-thirds of that still waiting to be passed on to mortgage holders, as their fixed rate deals end, in May 2023. Last Autumn, the Joseph Rowntree Foundation estimated 120,000 households (400,000 people) will be pulled into poverty by mortgage interest rate rises, alongside 750,000 households with a mortgage already in poverty. Finding that average of an extra £2,300 a year for the mortgage will mean more people experiencing net negative incomes, i.e. never having enough to meet basic living costs including housing, fuel and food. The problem of the rent, as Beveridge put it, was the most intractable challenge when (re)creating the British welfare state in 1942. The problem of the rent (and mortgage) then, as now, was that housing spending cannot vary, unlike food or energy costs. If renting privately or buying, the UK’s welfare systems and generally low wages mean that poorer households often cannot ‘trade down’ - they are often already occupying the only housing they can afford – while social housing waits are very long indeed.

KW - Homelessness

KW - Cost of living crisis

M3 - Other contribution

PB - The York Policy Engine/University of York

ER -