Britain’s high housing costs are creating a significant financial burden on low-to-middle income families, leaving them poorer than similar households in Germany, the Netherlands, and France, according to new research by the Resolution Foundation.
The report, Whose price is it anyway?, highlights that the cost of living for poorer families is exacerbated by the disproportionately high share of income they spend on housing compared to wealthier households.
While overall UK price levels are 8% above the OECD average, housing costs stand out as particularly inflated—44% higher than the average across OECD countries. Poorer households in Britain spend 22% of their total budgets on housing, compared to 13% for higher-income families.
Simon Pittaway, senior economist at the Resolution Foundation, said: “Britain’s recent toxic history of low growth and high inequality has left low-to-middle income families far poorer than their counterparts in Western Europe. These damaging income gaps are even worse once we factor in the prices of goods and services that matter most to these families.”
Despite food being 12% cheaper than the OECD average—partly due to VAT exemptions—this relative advantage is outweighed by housing costs. Poor German families, after adjusting for typical spending patterns, are £2,300 better off annually than their British counterparts. The gap is even more pronounced for poor Dutch families, who are 39% better off.
Pittaway added: “Britain’s housing costs crisis is a major driver of child poverty, and contributes to poor families being £2,300 worse off than their German counterparts. The crisis needs to be tackled urgently—from building more affordable homes to providing better support for low-income renters.”
