A week tomorrow, the Chancellor will unveil the country’s budget, and no doubt George Osborne will be thinking about ways to help out the ‘squeezed middle’. This group, made up of people on less than average wages but not the very poorest, has become a hot political topic.
Housing must be a key part of this debate. The idea of being stuck in the middle is a depressingly familiar story when you think about housing. Want to buy but can’t? Can’t get social housing or help with rent payments? Spending all your earnings on the mortgage?
Our latest policy briefing explores how the housing system squeezes families and holds them back from their aspirations in life. Whether it’s the people who are stuck with high housing costs and stagnant incomes, constantly worrying about debt, or the families stuck in the private rented sector with no hope of finding a stable home to raise their kids in, we need a better deal.
For politicians trying to help the squeezed middle, the temptation is always to announce a new first-time-buyer scheme – which was confirmed when the NewBuy scheme was launched with a fanfare this week. A hand onto the ladder, through arrangements with lenders, can make a good press release and raise the expectations of would-be buyers.
But I can’t help but think these schemes are often a smokescreen. I’d rather see government asking the big questions about the problems faced by low-middle income households. Like, why is the cost of housing so high and how can we stabilise it? How can the burgeoning number of families living in private rented accommodation feel more stable? Is social housing a good option for the squeezed middle?
NewBuy does little to address these big questions or provide real long term solutions for the squeezed middle. Commentators on all sides of the political spectrum have highlighted the scheme’s flaws: at best propping up house prices, at worst exposing hard-up families – and the tax payer – to negative equity if the market falls.
We’ll be considering these issues in more depth over the coming months, focusing on real solutions for those in the middle. If you’d like to know more, why not read the briefing and leave a comment?