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Rent arrears the fastest growing UK debt problem

National debt advice charity the Money Advice Trust today reports that rent arrears are now the fastest growing debt problem in the UK.

 

The number of calls to the charity’s National Debtline service from people with rent arrears has risen significantly since the economic crisis first hit in 2007. From January to October this year, the free advice helpline received nearly 20,000 calls for help from people with rent arrears, compared with just 8,000 over the same period in 2007 – an increase of 146 per cent. Calls from people with rent arrears have increased 37 per cent over the last two years, and 13 per cent in the last 12 months – more than any other debt type.

 

Additionally, figures suggest renters have faced a growing number of broader debt problems, with renters now accounting for 57 per cent of total calls to National Debtline, compared to 43 per cent in 2010.

 

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

 

“The long-term trend for rising rent prices is clear and its impact on the debt landscape is significant. Rent arrears are now the fastest growing debt problem we help people with at National Debtline, and we are in danger of falling into a rent debt crisis.

 

“Housing costs are the most important household bill of all, and to see such increasing numbers of people falling behind on rent payments is indicative of how the cost of living squeeze has hit many families very hard since 2007. We hear from thousands of people every month about the difficult decisions they have to make just to hold their family finances together.

 

“The risks of falling behind on rent payments are stark and it is vital anyone concerned about their ability to pay the rent seeks 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 you can also get free, impartial advice from Business Debtline.” 

     

Number of calls taken by National Debtline from individuals with rent arrears:
Jan - Oct
Number of calls taken on rent arrears
Percentage of total calls involving rent arrears
2004
1,670
4.2
2005
2,242
4.4
2006
3,965
4.9
2007
7,722
6
2008
9,240
6.4
2009
11,034
6.1
2010
11,855
6.3
2011
13,865
8.1
2012
16,737
10.5
2013
18,963
12.3
 
National Debtline's top tips for dealing with rent arrears:
  • 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.
 
 
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