Households are advised not to spend more than 30% of their gross monthly income on accomodation costs Shutterstock

Households are advised not to spend more than 30% of their gross monthly income on accomodation costs Shutterstock

The Statec report, “Le Logement, amplificateur des inégalités au Luxembourg” , published on Tuesday, found that in 2017 low-income households spent 42% of their income on rent or mortgage payments, compared with just 14.5% among the top earners.

The general principle for sustainable living advises households not to spend more than 30% of their gross monthly income on housing, including utilities for those renting.

“Therefore, for households on low incomes, the cost of housing takes up a large part of their budget,” the report author wrote, adding: “The cost rises more quickly for these housholds than their disposable income.”

House prices rose on average 5.4% from 2011 to 2018. If this trend continues, low income households will be pushed closer to financial precarity. In 2017, 15.8% of the population was at risk of falling into poverty. When one takes into account the cost of housing, a quarter (24%) of the population falls into this high risk bracket, the report found.