Rent arrears

Recent months have seen a wave of media and political attention paid to household bills and the cost of living. We’ve seen commitments made and pressure brought to bear on everything from energy bills to mobile phone contracts. Rail prices have been in the news, as have planned price rises in the water sector. At National Debtline we see the front end of these issues. We’re getting more and more calls for help from people with mobile phone debts, water rate arrears, and energy arrears. These are all fast growing debt problems, but none of them is the fastest. Up until the start of this year that unwanted accolade fell, perhaps unsurprisingly, with payday loans. This year the fastest growing debt problem we deal with at National Debtline should give us all pause for serious reflection.


In the past 12 months we’ve seen a 13 per cent rise in calls for help from people with rent arrears. Whilst the pace of this problem is quickening it is by no means a new concern. Calls for help with rent arrears have been increasing steadily over time – they are up 150 per cent over five years. Paying to keep a roof over your head is the most fundamental element of any household budget, so we should all be extremely concerned that more people are struggling to meet this most basic cost of living.


So what is driving this rise in rent arrears?


The first thing to consider is the cost of renting, which has been going up for some time. As more and more young people take more time to save the requisite funds to get on to the property ladder, the demand for rented accommodation increases. We already know that supply of housing is extremely limited and so the recipe for rental price increases is pretty clear. Whilst more mortgages are being taken out, the Bank of England has quickly moved to cool this activity fearing it might overheat the economy. As such there is little sign of this trend for rising rental costs changing in the short term. Whilst incomes remain relatively flat, the cost of rent is eating further and further into the household budget.


Additionally changes to the welfare system will have hit low income families quite specifically in the part of their household budget that covers housing costs. Where the new cap on total benefits is exceeded, it is Housing Benefit which gets cut. Additionally the Spare Room Subsidy – commonly known as the Bedroom Tax – will mean some low income families have seen a sharp increase in their rent. 


Making sure households prioritise essential spending such as their rent payments is just one of the vitally important elements of debt advice. That is why it is crucial anyone falling into rent arrears seeks free, impartial advice as soon as possible. We’re looking to work more closely with housing associations in the coming months to help ensure this happens. We’ll be offering training so that staff at housing associations can understand and deliver the basic principles of debt advice, and we’ll be helping them understand how to respond when their tenants need debt advice. 


As a society we should place very serious value on keeping a roof over families’ heads. With a reported long and cold winter ahead, it is more important than ever to ensure we can reach people struggling with housing costs before the problem becomes too deep to resolve.

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