Policy‑makers who believe that poverty is overwhelmingly a problem among people who rent their homes, rather than owning them, are today urged to think again. The spread of owner-occupation in the past 20 years means that as many as half the adults defined as 'poor' in Britain are either buying their homes with a mortgage or own their properties outright.

A study for the Joseph Rowntree Foundation uses these figures to challenge the fairness of existing state support for low-income households, where 92 per cent of help with housing costs goes to tenants and only 8 per cent to owners. It also makes it clear that many poorer households cannot be reached through regeneration and other initiatives that target council and housing association estates.

The research by Professor Roger Burrows of the University of York uses survey data concerning the one in four adults whose low incomes mean they go without two or more items that the majority of the population view as 'necessities'. Using this definition of poverty, 15 per cent of outright owners and 17 per cent of people with mortgages are poor, compared with 61 per cent of social housing tenants.

However, because there so many more owners – nowadays accounting for more than two‑thirds of all homes – mortgage holders (32 per cent) and outright owners (18 per cent) make up half the total number of people who are poor. Another 41 per cent of poor adults live in social housing and 9 per cent are in the private rented sector.

Looking in detail at the characteristics of low‑income home owners, Professor Burrows found that mortgage holders were more likely to live in poverty if they were young (aged 24 to 35); manual workers; out of work; lone parents; or came from a black or minority ethnic group. Poverty was also more common among housebuyers in the Midlands and Wales than other regions.

Home owners who had paid off their mortgages were an older age group, on average. But the range of risk factors associated with an increased likelihood of being poor was otherwise similar. Comparing low-income homeowners with poor people living in other tenures, the study also found that:

The report calls for a change in traditional thinking about poverty, especially the way that housing tenure is assumed to be a measure of relative advantage or deprivation. It also recommends reassessment of Housing Benefit and other existing state help with housing costs.

Professor Burrows said: “It is hard to justify the crude discrimination whereby 50 per cent of poor adults live in owner-occupied homes, yet receive only 8 per cent of state assistance with housing costs. We must also ask whether the area‑based interventions designed to tackle social exclusion that are currently targeted on social housing estates are the best way of combating poverty. Homeowners who are poor tend not to be concentrated in particular estates, with the result that current initiatives mostly fail to reach them.”

Note to Editors
Poverty and home ownership in contemporary Britain by Roger Burrows is published for the Joseph Rowntree Foundation by The Policy Press and available from Marston Book Services, PO Box 269, Abingdon, Oxon. OX14 4YN (01235 465500) price £11.95 plus £2.75 p&p.

A summary of findings is available here.

For further information contact:
Professor Roger Burrows 01904 432317

Issued by David Utting, Associate Director (Public Affairs) 020-7278 9665 / david.utting@jrf.org.uk