Providing opportunities for low- to moderate-income households to become home-owners remains a key policy concern across the UK, particularly in England. This study informs the debates about the potential and limits of home-ownership for low-income households.
It shows that:
- Poverty among home-owners has reduced significantly over time, but less so for households with mortgages – poverty was higher for this group in 2013/14 than before the financial crisis.
- Home-owners in poverty were twice as likely to report arrears (14%) than other mortgaged households (7%), and were overwhelmingly led by someone in work, meaning that the current system of mortgage safety nets fails to meet their needs. The report recommends a comprehensive review of mortgage safety nets.
- The homes of older home-owners in poverty required significant investment (£2 billion) to bring them up to the Government’s Decent Homes Standard. The report recommends that national governments ensure access to revolving loans and support to so work can be done on bringing homes up to standard.
- Policies that promote the expansion of home-ownership among low- to moderate-income groups should be accompanied by programmes that support these households, which are shown to be at greater risk of poverty and default.
- Regulatory authorities should check longer mortgage terms are sustainable over the whole term and monitor whether longer-term loans have any impact on the level of investment in pensions.
- Greater attention needs to be paid to the poor housing conditions among home-owners in poverty, particularly older outright owners. Fixing homes that are cold, dangerous or in poor repair should enable older people to stay in their homes for longer, and avoid homes becoming a potential cause of ill-health.
- A comprehensive review of mortgage safety nets is needed to determine how low-income home-owners should be supported in the future.