BBC News - Rent 'unaffordable' for low-income families in one-third of UK 15 July 2013 Last updated at 00:07 A third of Britain is effectively off-limits to lower-income working families because private rents are unaffordable, a new report claims. The report comes from the Resolution Foundation, which campaigns on behalf of low to middle-income families. It says most of southern England is now beyond the reach of less affluent households. The Resolution Foundation says this forces people to choose between a decent home and other essentials. With social housing usually unavailable and home ownership unaffordable for many first-time buyers, renting privately is often the only option for households on lower incomes. A BBC housing calculator also identifies how renting a modest two-bedroom home for less than £700 a month is almost impossible in London and much of the South East. Modest is defined as having a rent below 75% of similar properties in the area. The Home Truths report identifies local authorities that are "affordable" for a couple with a child requiring a two-bedroom property on a household income of £22,000 a year. Affordable is defined as a rent that is no more than 35% of net household income. On that basis, 125 of 376 local authorities in Britain (33%) are unaffordable for less-affluent working families. "The private rented sector is now, in large parts of the country, the most expensive form of housing," says Vidhya Alakeson, of the Resolution Foundation. It is also the only option for most low to middle income households, many of whom are faced with the unenviable choice of forgoing other essentials in order to pay for housing or living in overcrowded conditions to reduce their housing costs. The BBC housing calculator also allows users to see where they can afford to buy a house. A deposit of £10,000 is only enough to buy a two-bedroom home in 41% of local authorities, because a deposit of at least 10% is needed to get a mortgage. With a deposit of £20,000, almost 30% of the country remains unaffordable, including all of Greater London and much of the South East. Even with a £50,000 deposit, central London and areas to the south and west of the capital remain unaffordable. Analysts suggest recent rises in UK house prices have been driven by increases in London and the South East. "Home ownership is out of reach for the vast majority of low to middle income families because few have the savings needed for a deposit," says Ms Alakeson. While the crisis in London is well documented, there are affordability black spots in almost all regions of the country. Affordable is defined as a rent that is no more than 35% of net household income The government recently announced a Help to Buy scheme, offering loans for people moving into new-build homes worth up to £600,000. Another government scheme to assist those buying new-builds and existing homes is due to come into force next January. And shared ownership schemes provided through housing associations are also available to some first-time buyers. However, there are concerns that without a significant increase in housing supply, additional demand generated by such schemes will push up house prices, exacerbating the problem of affordability. The latest figures show that in the year to last March, just over 108,000 new homes were completed in England. But this is less than half the number needed to meet demand. We're building 170,000 affordable homes End Quote Housing Minister Mark Prisk Homelessness is on the rise with more than 55,000 households in temporary accommodation in England - 10% higher than a year before. More than 1.8m households are currently on the waiting list for social housing - a 60% increase in the last 10 years. The Mayor of London, Boris Johnson, has described the shortage of affordable housing as "the gravest crisis the city faces." In his plan for the capital, 2020 Vision, published last month, Mr Johnson writes that high house prices have had "brutal consequences for many Londoners." "Fewer and fewer take out mortgages in the way that their parents did, because they simply cannot afford the deposit," he says. Rents are now punishingly high, and pre-empt an ever growing proportion of your disposable income. There are concerns that London is pricing out the key workers it needs to function. Cost to income ratio for a low income couple with one child This map is for a couple with one child at the 35th percentile of the household net income distribution, living in a two-bedroom property at the cheaper end of the local housing market. Source: Resolution Foundation analysis of Hometrack data 2012/13 In a recent speech to housing representatives, the Housing Minister Mark Prisk said there was "no single solution" to the country's housing needs, conceding that the government could not "overturn a generation of undersupply, in one parliament." However, he said he believed the coalition was "making good progress." We're building 170,000 affordable homes and we're now committed to accelerate this to the fastest rate of building for at least 20 years. Responding to the Resolution Foundation report, the chief executive of the housing charity Shelter, Campbell Robb, said families were paying so much for housing, "they're forced to choose between putting food on the table, turning on the heating or paying their rent." Shared ownership schemes are one of the best ways to offer low-income families an affordable place to live. We need to see more schemes that are affordable for low-income families and that give them the stability and security that our current rental market sadly doesn't provide.