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Variation across households and Member States
In the EU in 2006, total housing costs - defined as including rent and mortgage interest payments (though not repayment of capital), as well as the costs of fuel, maintenance and repairs, but excluding any housing allowances received - amounted on average to around 20% of disposable income (after deduction of housing allowances) (see Figure 1). The scale, relative to income, varied from around 30% in Germany and the Netherlands to under 15% in Ireland, Cyprus, Luxembourg and Slovenia. There is only a limited tendency for housing costs to vary with housing tenure (or more precisely with the extent of home ownership), reflecting the fact that a large share of housing costs consists of maintenance, fuel, various charges and other costs, rather than rent or mortgage payments. Despite the fact, therefore, that the great majority of people in most of the EU10 countries of Central and Eastern Europe own their own homes or pay little or no rent, there is only a limited tendency for housing costs to be lower in these countries than in the EU15.
Figure 1: Housing costs relative to disposable income for total population, 2006
The burden imposed by housing costs, however, tends to vary inversely with income. The cost of housing, therefore, absorbs a much larger share of the disposable income of those at risk of poverty than it does of other people. In the EU as a whole, in 2006, such costs absorbed, on average, around 39% of the disposable income of those with income below the poverty threshold (Figure 2). In Germany, they absorbed over 55%, and in Denmark, Greece and the Netherlands over 50%. Only in Ireland, France and Cyprus was the figure below 25%.
Moreover, there are large variations in the scale of housing costs between those with similar levels of income. In part, this reflects whether or not people have outstanding mortgages (in the case of homeowners), and in part whether they live in low-rent or rent-free accommodation. Across the EU, therefore, some 40% of those with income below 60% of the national median had housing costs amounting to 40% or more of income, while almost as many (37%) had costs of less than 25% of income (see Table 1).
The distribution of costs differs widely from country to country, especially for those with income below 60% of the national median. In Denmark, Germany, Greece, the Netherlands and Slovakia, most of the people with income below this threshold have housing costs of 40% or more of disposable income; in ten of the other Member States, most of the people concerned have costs of under 25% of income, including in Ireland and Cyprus (where 75-76% fall into this category) and Spain, France and Finland (where 60-65% do).
Figure 2: Housing costs relative to disposable income for population at risk of poverty, 2006
