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Rent arrears fastest rising cause of debt in UK

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Rent arrears fastest rising cause of debt in UK

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Published by Max Salsbury for 24dash.com in Housing and also in Communities, Finance

Opinion: Does social housing need a tougher approach to rent collection? Opinion: Does social housing need a tougher approach to rent collection?

Image: Rent arrears via Shutterstock

Rent arrears are becoming the greatest cause of debt in the UK, a charity has revealed.

The Money Advice Trust says the number of calls to its national debtline service from people struggling with rent arrears has risen significantly since the start of the economic crisis in 2007.

From January to October this year, the helpline received nearly 20,000 calls for help from people with rent arrears, compared with 8,000 over the same period in 2007 – an increase of 146%.

Calls from people with rent-related debt have increased by 37% over the last two years, and 13% in the last 12 months – more than any other debt type.

Additionally, figures suggest renters are facing a growing number of broader debt problems, now accounting for 57% of total calls to the national debtline, compared to 43% 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.”

The charity offers the following tips to those struggling with rent arrears:

  • Don’t bury your head in the sand: 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. 
  • 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.
  • Speak to your landlord: make sure they understand your situation and that you are doing everything you can.

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