Who’s to blame for in-work poverty?

The Joseph Rowntree Foundation (JRF) released a study today (7 December 2016) that finds 7m Britons are in poverty despite being from working families.

We received advanced sight of the report ahead of publication but decided not to provide comment to the press ahead of the morning papers on the basis we did not want to give fuel to what could just turn into another anti-landlord story; one that might otherwise have been overtaken by events with the parliamentary vote on Brexit taking place.

It turns out it made quite a splash in the media and reports have varied in their coverage:

Guardian – Study finds 7m Britons in poverty despite being from working families

Independent – High rent and low pay put in-work poverty at record levels

BBC – Housing crisis ‘creates in-work poverty’

However, poverty is an important issue, so whether or not you’ve seen the story, we’ve summarised our thoughts on the JRF’s report, below.

What the JRF report says:

  • Deprivation is increasingly linked to the high cost and insecurity of private rented accommodation.
  • The proportion of people in work, living in private rented accommodation, and in poverty has doubled over the past decade.
  • The number of evictions by landlords has risen by 60% over five years to 37,000 annually.
  • The number of mortgage repossessions has fallen from 23,000 to 3,300 over five years.

What almost all media outlets missed in their reporting:

  • Social housing is in decline, and the PRS is now double the size since it was at turn of the century. In turn, more and more renters who might previously have been paying social rents, will now be paying full market rents.
  • The majority of evictions over last the last five years – as well as year-on-year – originate from social housing providers, not private landlords. We’ve blogged about this very issue here.
  • Interest rates are at an historic low, and have been since the financial crisis– making keeping up with mortgage payments (if you have been able to buy) more affordable than ever.

To conclude:

Ignoring the fact that some reports have looked to point the finger at the PRS, we actually agree with much of what the JRF is highlighting.

Affordability is a huge issue and will continue to be a concern unless a substantial increase in housing supply is achieved – especially social/affordable housing – and so long as the welfare budget continues to be stripped away.

In fact, our own research shows that landlords echo this sentiment – with three quarters in agreement that the government should be funding more social housing.  Furthermore, the number of landlords who let to tenants in receipt of housing benefit has fallen to an all-time low of 16 per cent – evidence that the amount of benefit that tenants receive is simply not enough to help them cover their rents.

However, perhaps the most interesting finding of the report is that the overall proportion of the population defined as being in poverty – 21% – has ‘barely changed in more than a decade’ despite the total population increasing overall. What this shows is that not only are more people now living in poverty, the circumstances in which people find themselves in poverty has expanded. Surely it’s time that the government sits up and takes note.

 

One thought on “Who’s to blame for in-work poverty?

  1. Mass uncontrolled immigration is responsible for reduced wage levels
    Once the UK has exited the EU it can control immigration
    We don’t need 100000 Romanians and Bulgarians coming here every year………….unless they are doctors and nurses etc!
    There is also the issue of those who choose to be under or unemployed
    The welfare system is far too generoüs
    The OBC should be reduced to £15000 in London and £10000 outside London
    This will force the feckless to do the jobs that the migrants currently do
    Currently employers have jobs but can’t get the feckless unemployed to do those jobs
    Which is why migrants do such jobs
    It is those that bother working full time that are worse off than those who don’t work or work part time only as a choice as welfare makes it pointless working longer hours

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