Rising housing costs in Scotland equivalent to 13 per cent tax increase, Resolution Foundation analysis finds

Written by Jenni Davidson on 26 April 2016 in News

Scotland had the second highest rise in housing costs as a proportion of income in the UK

The increase in housing costs in Scotland over the last 20 years is equivalent to a 13 per cent rise in tax, according analysis by the Resolution Foundation.

The think tank found that Scottish households spent an average of 18 per cent of their income on housing costs in 2015 compared to 12 per cent in 1995.

It was the second highest increase in the UK after London.


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However, Scotland still has the second lowest proportionate spend on housing in the UK after the north east of England.

Londoners spending an average of 28 per cent of their income on housing and those in the south east, south west and east of England 22 per cent.

The analysis also found a concerning rise in the number of people spending a third or more of their income on housing.

Across the UK as a whole 3.3m households or 17 per cent spent more than a third of their income on housing costs in 2013/14, compared with 1.6m households or 10 per cent in 1994/95.

And six per cent, 970,000 households, spent more than half their income on housing in 2013/14, a significant escalation from the three per cent or 540,000 households living in that situation in 1994/15.

Those most affected by the increase were low to middle income households and benefit-reliant households and private renters are the sector with the worst housing to income ratios.

Lindsay Judge, senior policy analyst at the Resolution Foundation, said: “There is a risk that housing could do to future living standards what falling earnings did to recent living standards.

“Avoiding this will require decisive policy action over decades to get housing costs back under control.

“The government must be more ambitious. It should look beyond simply giving a few people a leg up onto the housing ladder and tackle the bigger issues of supply that is the root cause of rising housing costs.

“As home ownership moves out of reach for ever more families the government should also reform a private rented sector that is simply too insecure for many finding themselves dependent on it.”

The Scottish Greens have responded to the new report. Maggie Chapman, Scottish Greens co-convener and spokesperson on social justice, housing and welfare said: "Housing is one of the most important issues we get on the doorsteps. People's concerns about housing almost always come back to affordability.

“But Westminster governments over the past 35 years have repeatedly used the housing market to drive economic growth. This is both shortsighted and drives money from the productive economy and into housing.

“We need to end the aggressive rises in housing costs. With the average age of a first time house buyer now 37 and private tenants facing rapidly increasing rents we need to make housing affordable again.”

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