MAT > Media centre > News > MAT warns of a rent debt spiral

MAT warns of rent debt spiral

  • ​National Debtline has seen a 99 per cent increase in rent arrears since 2007

  • Renters struggling to stay afloat, never mind save for a deposit

Figures released today by debt advice charity the Money Advice Trust demonstrate the extent to which rent price increases are affecting households across the UK. The number of calls to the charity’s National Debtline service from people with rent arrears has exploded over the last five years. From January to August 2007, the free advice helpline received just over 6,000 calls from people with rent arrears, compared with 12,000 over the same period this year an increase of 99 per cent. Calls from people with rent arrears have increased 28 per cent over the last two years, and nine per cent in the last 12 months. Nearly ten per cent of all people calling National Debtline have rent arrears, compared to just six per cent in 2007 and eight per cent last year.

Additionally, figures suggest renters have faced a growing number of broader debt problems, with renters for the first time accounting for more than half of the total calls to National Debtline.

Joanna Elson, Chief Executive of the Money Advice Trust said:

“In the current environment it is clearly difficult for people to save the money for a deposit to buy a house and this has led to more people remaining in the renting market for longer. Where there is limited supply and greater demand, rising prices will always follow.

“However, rising rent prices are not only making it harder for people to save for a deposit, they’re also pushing more people in debt. This is a dangerous spiral; with increasing numbers of people entering the renting market, and fewer people leaving it, it is hard to see how the situation will improve.

“Many people’s budgets are tight already with stagnant earnings growth and inflation above the Bank of England’s two per cent target. Sharp jumps in renting costs can push individuals and households over the edge and into an unmanageable situation.

“Anyone struggling with their finances should seek free, impartial advice as soon as possible. Advice is available online through My Money Steps, over the phone at National Debtline, or face to face at your local Citizens Advice Bureau. If you are a struggling buy-to-let landlord, or if you are self-employed or the owner of a small business, you should contact Business Debtline.”     

Number of calls taken by National Debtline from individuals with rent arrears:

Jan - Aug

Number of calls taken on rent arrears

Percentage of total calls involving rent arrears

2004

1,405

4.33%

2005

1,453

4.12%

2006

3,131

4.97%

2007

6,064

5.94%

2008

7,198

6.45%

2009

8,267

5.97%

2010

9,377

6.14%

2011

11,066

7.92%

2012

12,043

9.59%

 

National Debtline’s top five tips for people struggling to make the rent

  • Don’t bury your head in the sand: dealing with rent arrears can be an isolating experience, but it is vital to do what you can to get on top of the problem, the first step should be to get some free, confidential, independent advice.
  • Work out a personal budget: this will help you see where your money is going.  See if you can make any savings to help pay the rent by reducing your outgoings.
  •  Rent is a priority debt: you should pay the rent each month before you make any payments on non-priority credit debts such as credit cards and unsecured loans.
  • Make sure you are receiving any Housing Benefit you are entitled to: to make a claim ask your council’s Housing Benefit office for a form.  Also make sure you are claiming all the benefits and tax credits you can. 
  • Speak to your landlord: make sure they understand your situation and that you are doing everything you can. With many types of tenancy the landlord can take swift court action and the court cannot always let you stay in your home. Don’t ignore the problem.  If you get any court papers, get advice immediately.

 

 
 
© Money Advice Trust Charity Number 1099506
site by rubbaglove