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?
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 by social scientists and the government as earning below 60% of average incomes.
"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.
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.
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.
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.
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.
We purchased a home almost three years ago now, and we still live hand to mouth. A brief time out of work last year almost cost us out house. There was no help from the state, and without our families help their would have been yet another property repossession from hard working people.
Alan Foley, Edenbridge, Kent
This story illustrates perfectly the problem with the suggested local income tax suggested recently. It was cited as being fairer as it would be based on ability to pay. Working is not an indication of having disposable income. Quite the opposite, many working families are struggling to keep up with mortgage payments and would actually be better off had they not bought their homes and lived on benefits.
My wife and I have recently fallen into the homeowners poverty trap. She suffered a stroke last year and has grown progressively worse over the last nine months. In April this year I gave up work to become her full time carer. This is crippling us financially as it is almost a full time job fighting with the DSS and the DWP to get the level of benefits that will enable us to survive. At the moment we are being forced to use our meagre savings, just to pay the bills. The DSS set my income support at just £22.90p per week, without a proper explanation, and the DWP denied me carers allowance for a full two months. I am only now getting help, from the CAB, in claiming help with mortgage costs. As I have never claimed benefit before I find the whole system is a nightmare and it is no wonder that so many, especially amongst the elderly, fail to claim what they are entitled to. I find that means testing is a farce, concentrating only on what you have and not taking any account of your outgoings.
Keith Read, Wellingborough, Northamptonshire
My problems stem from having been made redundant in Feb 2003 I was out of work for over 6 months. When I did get a job I had to move house and my employer did not provide any help with moving costs. I had to take out a bigger mortgage but my salary is less than before I got made redundant. I work in IT and despite 20 years experience I'm only being paid the sort of salary graduates get. Clearly ageism is alive and well. (I'm aged 42).
Richard, Chippenham, England
This definition of poverty devalues the concept and draws attention from genuine suffering. Somebody who owns a home will almost certainly have equity which they can cash in at any point. They may have overstretched themselves, but this is poor financial planning and not in any meaningful sense poverty.
Two years ago my company went under, owing me a lot of salary. My Fiancée and I were already in a lot of debt in order to buy our tiny house and was gutted at the lack of help I received after years of paying my taxes. We were forced to sell the house because of the difficulty of getting a job in my industry and now we live with my parents. We're going mad and there seems no way out, we cannot even afford rent. When will people rise against the crazy situation this country is in that benefits only the banks?
Anon, Winchester, England
We are a family with one child, we brought our house, which needs renovation and has no heating, then my partner became ill and I had to become the main wage earner, to say we struggled is an understatement, we had saving, but they soon vanish when you have a mortgage and associated bills to pay as well as childcare on one wage! Childcare and mortgage came to over £1200 a month, and I was only earning £1000! My partner is back at work now but on a much reduced salary, and I regularly have to make the decision to pay a bill over feeding myself, or providing my son with new shoes/clothes. We thought we were well prepared we had savings and we were insured, but when illness strikes and it's the one illness your insurance doesn't cover, it's hard. We had no help whatsoever, in fact we'd be better off if we lived in council accommodation and on benefits! Where is the sense in that? I've worked all my life, but yet to sit back and do nothing I get more.
The points that Piers, hasn't taken into account are twofold: firstly, having equity in a property is not like having a piggy bank, to be raided at will; in order to release equity you either have to sell the property, or remortgage it. The former is no good if you cannot then get anywhere else to live (housing authorities will not re-house those deemed to have made themselves homeless voluntarily, and in some circumstances include in that category people whose properties have been repossessed), and the latter is only an option if a mortgage lender is prepared to advance you the money, at a monthly repayment you can afford; secondly, that an unforeseen and catastrophic change in personal circumstances (which can happen to any one of us, irrespective of how well-insured we are) is not "poor financial planning". Most of the hardship described on this page has resulted from unforeseen changes in circumstances, such as ill-health; not everyone has the luxury of paid sick leave, and income protection insurance is often prohibitively expensive.
Paul, Worthing, UK
People get into poverty & house ownership problems due to their own negligence. Sensible people ensure that they have adequate insurance to cover unemployment, critical or long term illness & disability & incorporate aspects such as these into their overall budget. In the main problems arise because people are too short-sighted & engage themselves in huge mortgages that cannot be sustained should the hand of fate intervene. It's all about planning.
Popular wisdom has, for years, been to buy your own home. Popular wisdom is often slow to change and takes little account of the real financial environment or personal circumstances. UK schools have let the individuals down because they simply do not teach one of the most important life skills of all and that is Financial Planning!
Colin, Plymouth UK
When I was unfortunately made redundant 2 years ago, I was disgusted to realise that as someone who had had a job and paid taxes for the last 20 years, I would get very little help. Being a homeowner just increased the problems. You can't get any financial assistance whatsoever, despite it being around 1/3 of the cost of renting in my area, the benefits department suggested I sell up and rent instead! It seems that if you've never worked or ever paid any taxes the benefits office will bend over backwards to help you, but if you have worked and paid taxes they go out of their way to make life hard merely because you're not a 'hopeless' case! Now I am back in work again, but it was a shock to discover that self reliance works against you in a number of ways should anything unfortunate happen.
If you cant afford a house then you shouldn't buy one. If your circumstances change for the worse then you must plan ahead, sell up, and move into rented accommodation. Owning a house is a luxury, not a necessity.
"Poor homeowners" sounds like an oxymoron to me. As long as the house can be sold there is a possible way out for those struggling and a return to renting isn't actually the end of the world. I've gone from owning to selling and renting and back again a few times, as dictated by circumstance and am none the worse off for it.
Della , Smethwick