The Home Stretch: coping with high housing costs

Despite the strain that high housing costs cause, millions of people on modest incomes continue to live in high cost areas and are somehow coping. The Resolution Foundation report explores six ‘coping strategies’ – working more, increasing the term of a mortgage, getting help from friends and family, over-crowding, lowering standards and doubling up. It looks at how effective each of these would be in bringing housing costs within reach of three typical families. The effectiveness of each coping strategy depends on family circumstance and varies by household type and geographical area.

The Home Stretch finds that 2.2 million working households in Britain with below-median incomes are spending a third or more of their disposable income on housing, leaving an average of just £135 left over each week for other necessities. For modest income households looking to rent, they would have to spend at least a third of their disposable income to rent a low cost property in around one in five local authority areas. This proportion rises to over a third of local areas if the household wants to get onto the housing ladder with a mortgage. This does not include the challenge of saving for a deposit but only looks at the monthly costs of mortgage payments.