A 'Debt Crisis' may be looming due to rent arrears
The UK is facing a “rent debt crisis” according to debt charity Money Advice Trust. Rent arrears are the fastest growing debt problem, and renters are becoming more likely to seek help with their debts.
In 2010 just 6.3 per cent of callers to he MAT’s National Debtline, which provides impartial advice to borrowers, were in rent arrears. In 2013 that number has risen to 12.3 per cent.
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.
Paul Crayston of the MAT says that a much greater number have found themselves in arrears, as real incomes remain low and credit is difficult to obtain elsewhere.
“As credit becomes harder to access, people who used to build up large debt are now falling more quickly into rent arrears. There were people who would have been paying these kinds of debts on credit cards.”
Many people struggling to pay their rent are reluctant to tell their landlords, however National Debtline advises those struggling to be honest about difficulties.
“Nearly always the best thing to do is open up a dialogue,” says Mr Craystone. “Your landlord will notice that you aren’t paying the rent, so if you don’t speak to him it won’t help.”
Campbell Robb, chief executive of housing charity Shelter, said: “With nine million people now renting from a private landlord, high rents are stretching many ordinary families to the limits of what they can afford.
“Until we put an end to the housing shortage that’s driving up rents and house prices, things are only going to get worse.
The MAT also warns that rent should be treated as the highest priority debt, and advises anyone struggling with rent to seek advice over the phone from the National Debtline, online through My Money Steps, or face to face at Citizen’s Advice Bureau. Buy-to-let landlords struggling with mortgage repayments can seek advice from Business Debtline.