u k homeowner poverty life !

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    Last Updated: Monday, 25 July, 2005, 08:33 GMT 09:33 UK

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    First-time buyers on poverty 'knife-edge'
    By Julian Knight
    BBC News personal finance reporter



    Homeowners make up the majority of Britain's poor
    Many would-be first-time homebuyers consider getting on the property ladder a passport to prosperity but, it seems, it can also be a financial millstone condemning some to poverty living.

    Runaway house price inflation has helped make many homeowners' fortune, as long as they have timed their house purchase and sales to make the most of the boom.


    GUIDE TO UK POVERTY
    How is it that nearly one in five Britons live in poverty?


    In detail


    But there is another side to the homeowners' tale and it is a million miles away from the sunny picture of instant profits painted by so many TV property programs.

    According to official government statistics nearly six out of 10 people defined as in poverty are homeowners.

    In this instance being in poverty is defined as earning below 60% of average incomes.


    Homeowners are at the greatest risk of falling into poverty during their first few years of homeownership, normally between ages 25 and 34

    Professor Roger Burrows, poverty expert

    "People normally think of people in poverty being single mums on council estates or people living in a rented bed-sit but this is a stereotype.

    "By far the largest number of people in poverty are homeowners, many of them young first-time buyers." Professor Roger Burrows of the University of York's sociology department, an expert on UK poverty, told BBC News.

    Poverty trapdoor

    According to Professor Burrows the financial strain of buying their first home leaves many first-time buyers with little disposable income.

    Many can't afford what many people consider to be essentials such as a second pair of shoes or keeping their home in proper decorative order.

    It only takes the lightest of touches to send people spiralling down - a period of illness or a divorce

    Marianne Ten Kate, Elizabeth Finn Trust


    How a life shock can lead to poverty

    Professor Burrows believes that millions of first-time buyers are at risk of falling through the poverty trapdoor.

    "Homeowners are at the greatest risk of falling into poverty during their first few years of homeownership, normally between ages 25 and 34.

    "In the past inflation has helped erode their mortgage debt but now with today's first-time buyers will be weighed down with their debts for far longer than in the past."

    Professionals on hard times


    Marianne Ten Kate of the Elizabeth Finn Trust, a charity which offers financial support to professionals who fall on hard times, millions of Britons could be living on a poverty knife-edge.

    "Savings have fallen to record low levels and millions do not have a safety net.

    "It only takes the lightest of touches to send people spiralling down - a period of illness or a divorce," Ms Ten Kate said.


    The reality is that the 60 year old welfare state is not designed for homeowners

    Helen Wanless, Age Concern

    But can homeowners truly be in poverty, after all it is widely accepted that there is a whole generation of young people who can not afford to join their ranks?

    "If you consider that poverty is about lack of opportunity what could be more restricting that being mortgaged up to the hilt so much so that even a small change in your personal financial circumstances could lead to you losing the roof over your head," Professor Burrows said.

    As for simply selling up and relieving themselves of their property burden, Mrs Ten Kate told BBC News that this holds dangers.

    "Selling up means losing friends and crucially a point of reference. If the individual is already coping with a difficult situation in their life then such a step can lead to depressive illness," she said.

    State help lacking

    Homeowners often receive little state help, as they can be denied benefits available to people who rent or live in local authority housing or excluded from local regeneration initiatives simply because they own their own property.

    Housing benefit, for example, is, usually, only available to people who rent or live in local authority accommodation.

    In fact, overall, according to the Joseph Rowntree Foundation, only 8% of state help with housing costs go to homeowners.

    The reality is that the 60 year old welfare state is not designed for homeowners

    Helen Wanless, Age Concern

    Even where there is help available, campaigners suggest that homeowners do not know about it or think that the fact that they are property owners bars them from making a claim.


    This problem is most acute amongst elderly homeowners - who are often asset rich but income poor, living off the state pension.

    Recent research has shown that just 40% of elderly homeowners entitled to council tax benefit actually claim it.

    "Older people in poverty, in particular, feel that state benefits are not available to them," Helen Wanless, spokeswoman for Age Concern told BBC News.

    In recent years, according to official figures, pensioner poverty has been on the decrease but still a large proportion of homeowners in poverty are elderly.

    Elderly people are generally far more likely to be owner-occupiers - after all they have had time to pay off their mortgage - and this group accounts for roughly half the total number of poverty-stricken homeowners.

    Often elderly homeowners want to hold onto their homes to pass onto their children but in the meantime face a struggle to make ends meet.

    "Many pensioners are owner occupiers and they have to choose between eating and mending a leak, repairing heating or protecting against damp."

    "They can obtain state loans to help with repairs but the reality is that the 60 year old welfare state is not designed for homeowners," Ms Wanless said.

 
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