Hard-up West Country families face a further squeeze on their finances in the nation’s priciest region, it emerged yesterday – with more pressure on their budgets and increased reliance on state benefits.
Almost half the households in our region expect their financial position to deteriorate over the next year, a study has found. The findings of the Markit household finance index underline warnings to Prime Minister David Cameron of a backlash from the “squeezed middle” increasingly struggling to get by.
The report said despite a drop in debt levels, and employment income staying almost stable, many people are worried for their financial future. More than twice as many families expect their finances to deteriorate over the next year, at 45 per cent, compared with just 20 per cent who predict an improvement.
Households are worried about higher living costs, amid warnings from analysts of energy bill hikes and rising food and petrol prices.
Markit’s Tim Moore said the findings were a clear signal that “households are likely to keep a tight rein on spending in the months ahead”.
The rising concerns over the financial future are seen across all age ranges, income groups and job sectors. The Western Daily Press reported last month how pensioners across the West are being hit hardest by rising prices, with those living in the countryside doing worse than their counterparts in the towns. Older people miss out because while prices are soaring, interest rates are low, reducing the returns on their savings.
The region does especially badly as it has the country’s highest proportion of pensioners, with the population living longer than elsewhere.
Meanwhile, a report from the National Housing Federation warned that working families increasingly depend on state benefits to avoid being evicted from their homes. The federation says a failure to build enough new homes in recent years has pushed rents and house prices up, leading to an 86 per cent jump in housing benefit claims since 2009 by those in employment.
The Daily Press has revealed how fewer than 1,900 affordable homes were started in the West last year, which experts say is far too few to meet demand. The study said 10,000 more working families now need housing benefit every month to help pay their rent, with 417,830 more workers claiming them over the last three years.
NHF chief executive David Orr demanded a solution for “millions of families” who are struggling to keep on top of their rents and being priced out of the housing market.
“These people are the ‘strivers’ the Government wants to help, yet their future is looking bleak,” he said.
The organisation said 390,000 new families were formed in 2011 but only 111,250 new homes were built.
Its report says just 11,807 houses were built in the South West last year by private developers, along with 4,143 by housing associations and just 150 by councils. The region has the biggest gap between average house prices and wages outside London and the Home Counties. And there are 2,000 families in temporary accommodation in the South West, and 186,305 households on the housing register.
Housing Minister Mark Prisk said: “With over three million people relying on the private rented sector, we are determined to attract new players to the market and pull out all the stops to get Britain building. But it’s right we also get the Housing Benefit bill under control and under our reforms, those on housing benefit can still afford up to a third of homes on the local rental market.”
Meanwhile, a survey from the Energy Saving Trust found fewer than half the people in the South West would talk to family or friends if they were struggling to pay their bills.