Cost of living crisis pushes 'squeezed middle' off the housing ladder | Business | The Observer

Cost of living crisis pushes 'squeezed middle' off the housing ladder | Business | The Observer

People on low to middle incomes are facing a "perfect economic storm", which is cutting their living standards and dramatically reducing their ability to buy their own homes, new research will show this week.

The independent Resolution Foundation is to launch a major inquiry into living standards among the so-called "squeezed middle", having identified economic trends – in existence since the 1970s – that have led wages for this income group to grow at a slower rate than the economy.

The foundation, which aims to improve the lot of 11.1 million people, will reveal evidence that home ownership is slipping out of the reach of those living in households with below-median earnings.

It defines low and middle earners as those with incomes between £12,000 and £30,000 for a couple with no children and up to £48,000 for a couple with three children. Broadly, they are defined as not wealthy enough to benefit from private markets but too prosperous to receive benefits from the state.

The foundation will say that 41% of young low-to-middle earners live in privately rented accommodation compared with 14% in 1988, suggesting a dramatic reduction in the number of those who can afford to get on the housing ladder.