Thousands of tenants are being forced into debt by high rents, a debt counselling charity has claimed.
Consumer Credit Counselling Services said that last year, more than 10,000 people contacted it for help with rent arrears – an increase of 27% on the previous years.
On average they were £760 behind on their rent, and were £82 short of the amount needed to cover their monthly living expenses.
Private tenants were in the worst position, owing £924 in arrears and having a monthly budget deficit of £145. Tenants in arrears to housing associations were on average £705 behind with their rent, and the average arrears for local authority tenants was £622.
The charity – which stresses that its ethos is to help the ‘can’t pay’ not the ‘won’t pay’ – says that the average rent rise for all those who contacted the organisation last year was 2.4%.
Delroy Corinaldi, the charity’s director of external affairs, said: “A very large number of people are struggling to keep up with their rent payments – and with rents near record highs, the problem is getting worse, not better.
“For many people, another rent hike will be the straw that breaks the camel’s back.”
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Comments
1, The lenders are not going to perpetuate that will risk the status quo without good cause so nothing to worry about there
2 well that is just one of your psuedo intellectual sentances that says and means nothing
3 this is the one that show you to be out of touch. some people borrowed beyond any rational limit on the back of 0.5% interest rates, many are fixed at those rate or have trackers running at about 0.75% interest, many are still riding a for the time being unstoppable wave of rising prices in London. Only theone s left with property after the fall happens are at risk but then only if they haven't been smart enough to put a bit by to see them through a lean time.
Dave you statrted of by making some sense but as time has gone by you have taken yourself up a one way street and making yourself more thick than Rant. that is not a good label to tie round your neck!
1/many lender on btl have clauses stating a certain % of equity should exist as part of the contract...they can ask you to pay off some of the mortgage or sell the property
2/volume will increase as more people will sell as prices fall...forced sellers/people throwing in the towel/getting out while they can..banks will ease lending as prices plunge as the downside risk reduces
3/anyone who think 0.5% interest rates and the biggest bubble in uk history is sustainable I would suggest is not very clever
He is barking isn't he. Quite how Dave sees rising costs and interest rates, large deposits etc as conducive to the increase in mortgages is beyond my humble understanding of finance; he has always tried to avoid answering so I guess I'll never know.
There are very few creatures quite as short sighted as you Dave, dispite all your education all you can see is one point of view.
I don't quite know whether someone is teaching all this to you or whether you are making it all up in at attempt to be convince yourself you are smart. Either way as long as 1 penny more in rent comes in than goes out on borrowing and repairs, negative equity is only a paper exercise. The whole point about a portfolio is not for capital growth it is for long, long term investment.
returns on buy to let make little or no sense unless you get capital growth...btl will be hit by
1/falling prices and equity
2/rising costs and interest rates
3/falling rents as people buy when prices fall
4/extended gaps in tenants
5/backlash at insecure rental agreements
6/liquidated portfolios as negative equity looms
7/tax
good luck if you have a mortgaged portfolio,but you'll have 20 years of pain to deal with first
woooooo! the housing warrior reads a story that claims landlords are copping 50% of the oppressed under class's wages and he thinks it's true!
If the 30% of tenants who pay more than half their wages in rent don't like paying 50% they have an option of getting somewhere smaller.
If landlords are smart enough to chose make their money from providing accommodation for others is there a law that says that they should not be able to achieve a market rent, just so their tenants can access Facebook, Twitter and Plumpers.com whenever the mood takes them?
Or material wealth is so unimportant that you live on the basic necessities and reinvest your financial profits into the benefit of society?
Very simply.... yes! I am lucky enough to know that family friends, health, time and respect are the few things that cannot be bought and so material wealth is of no real value.
Before you try to tar me with a brush of ignorance, re read my post in the context of this story and the previous rant by Rant.
In real terms the £35/month one pays for an Iphone pays the interest on £28000 of deposit which is more than enough to pay a 15% deposit on an average house. So yes an Iphone will keep folk from buying their first home
and for the benefit of Rant who thinks the generation ahead of him had it so easy. The interest element on my borrowed deposit in 1985 when interst rates were about 12.5% was £31.25 per month.
@be careful not to disrespect
"Boo Hoo Bo Hoo, we can't afford to buy or rent because we have been forced to buy and run every igadget that comes to the market"
A demonstration of your ignorance, your delusion that everyone under 40 is so obsessed by technology that the £30k they need for a deposit, £850pcm they need for rent, has been spent on an iPhone.
Apart from ignorant you are hypocritical. People don't deserve affordable housing because they are so obsessed with material goods? You hold undeserved material wealth in such contempt, yet think landlords deserve 50 per cent of the money which people work for. Market forces have pushed landlords' income up, not harder or better work.
Or material wealth is so unimportant that you live on the basic necessities and reinvest your financial profits into the benefit of society?
Oh give it a rest Dave - oh sorry, rantnrave, you've been baging this drum for ever and you ain't convincing anyone.
You say you don't begrudge Boomers their good luck yet it is obvious you are desperately envious of both that and the wealth they have.
You seem to forget (probably haven't read about) the decline of British industry because of Japanese and Korean imports and while claiming that mortgages got paid off by Hyper inflation you are completley disregarding the Hyper interest rates that went with them.
Many of us have had the pleasure (Genuine) of employing younger staff and have watched £35,000 - £80,000 annual salaries being pissed against the wall in High Streets in this country and abroad. It is beyond me why many of those staff, despite advice otherwise ended up with massive personal debt and many remained living at home.
2 lads I had on my team managed in 3 hours to stick nearly £400 in the knickers of an Eastern European Slut and they were the ones who needed a sub on their wages most months
So what with Binge Drinking, an obsession with gadgets, grooming products and a Lemming like desire to catch the latest STD my opinion on the woes of your generation is less than sympathetic.
I don't begrudge the good luck that the Boomers have had. I just wish more of them would acknowledge it as that, rather than think they've done well because they worked hard.
Sure, they probably did work hard, but the wage inflation in the 70s went along way towards paying off the Boomers' first mortgages. The explosion of cheap credit in the noughties then gifted the over 50s a stack of unearned equity. This has convinced the Boomers that rising house prices are a God-given right and that 'you can't go wrong with bricks and mortar'.
Many seem to think that us young 'uns aren't experiencing the same because we're not working hard enough and waste money. The fact that the economic environment today is totally different, with hundreds of millions of Indians and Chinese people able and willing to do the jobs of British people for significantly lower wages, seems beyond the ability of many Boomers to grasp.
No doubt that part of the blame for that lies with the likes of the spin that the Daily Mail puts on things. Just this week an article appeared on their website with the headline of how high house prices were blighting Britain's economy. That lasted all of an hour before the headline was changed to something along the lines of uneducated young people threatening the economy's future. I've no doubt which headline was deemed to have appealed more to the Mail's typical readership.
Still, the Boomers are going to be learning the hard way soon that house prices do not always go up. Over the coming years, many of them will be looking to downsize from large family homes and release the unearned equity they think their property still has. Demographically though, there will not be enough buyers for all those homes. At the same time, the Boomers will find that the younger generation they have mocked for their financial incompetence will not be in the financial position to buy that property at anything like the price that the vendors think it is worth.
That just happened to a particularly obnoxious colleague who recently retired. As far as he was concerned, houses were made of gold bars, not bricks. 18 months of testing the market at a ridiculous price and not having had a single viewing let alone offer, he's now on with the third different EA, with an asking price some £20K (10%) below what he paid for the place in 2006. No doubt, that Dante's boiler was having problems that day.
YOUR parents too much, for they are the ones who have raised rude, ignorant and arrogant child.
Before you take offence, wait 10 years and re-read every last post you have excreted on the readership of EAT and LAT and work out why that is not a personal attack but an honest appraisal of the character you have portrayed to us all.
Boo Hoo Bo Hoo, we can't afford to buy or rent because we have been forced to buy and run every igadget that comes to the market.
Let's hope the evolution of mankind doesn't come to an embarrassing end with the whole of the next generation freezing or starving to death because their technology and connectivity failed to keep them dry or fed.
Oh, and unlike today, the Boomers had free university education and only required one person's salary to pay off the mortgage. They often forget these facts when they start bashing the younger generation...
I would welcome interest rate rises. Would do my savings pot the world of good. Would also force the hand of many who overborrowed after watching too much property porn. Interest rates at 8%? Bring it on!
There are prudent Boomers and not so prudent Boomers. Ditto for the generation(s) beneath them. The Boomers didn't spend lots of money on iGizmos when they were younger because, erm, those things didn't exist? The over 55s are still one of the most indebted generations out there. Fact. If they are all so prudent, why are so many desperately piling into BTL? Answer, because they didn't save or plan enough for their pensions. If the younger folk have poor financial skills, then one also has to ask the question - who raised them that way?
The greatest Rant ever, well done mate!
You really don't understand much do you? The great thing about Equity release schemes is that we have all borrowed to the limit on over valued properties so the only ones to lose will be the banks!
You see to qualify for Equity release one has to be mortgage free and own the asset. Having worked hard and paid off our mortgages it is up to us what we squander our wealth on. If we do give ourselves gout and diabetes by really living it up with what is our money and your generation's inheritance, tough on you! Quite frankly the post boomer generation appears for the large part to be a whiney, greedy generation that will only be satisfied by more and more material stuff and who seem to think they are owed a full and comfortable affluent lifestyle. Sorry to break the bad news but Tony and Gordon's promised land was all make believe.
Guess what Rant? with the economy about to collapse good and proper there is going to be only one way to stop massive inflation. That's right big rises in interest rates, who will that benefit? Us!
Ah yes - young people don't know how to budget blah blah blah. The Boomers meanwhile are the most financially responsible people on the planet. When tempted with the possibility of withdrawing equity from the rising price of their properties, not a single one of them p****d that cash up the wall on cruises and sports cars. Not one, I tell you. Today's obscene level of house prices (which influence rents) have nothing to do with the over 55s trying to recover the money they have squandered through Mortgage Equity Withdrawal. These financially wise Boomers would never borrow beyond their means and try to pass that debt on to the younger generation. No sirree, not at all...
£31/month is the cheapest deal I can find for an Iphone
When someone even starts to mention buying alcohol while bemoaning not be able to pay their rent and claiming the internet to be essential it just goes to show what and priorityless society Great Britain has become.
£11/ month is £132 you are not stealing from your landlord.
@ Call me old fashioned, but...
Social networking sites are free hence their popularity and internet access IS an essential of modern life. I pay £11 a month included in the phone - you couldn't get a round of drinks for that! Any young person who isn't fully computer literate has no chance of a decent income (and definately not one that will pay a £850pcm rent!!)
Inflation is 3% but wages remain static, unemployment is sky high - but even those statistics given by the government are dumbed down because of the increase in part time employed.
If rent takes 50% of income and rising what hope does the economy have of recovering when no one has any money to spend on the high street? It baffles me how the man on the street takes the flack for the recession and its consequences.
I concur with the previous four comments.
They could also apply to (many - but not all) of those griping about not having deposits to buy a property! Whilst still at home their parents went without "luxuries" and scrimped and saved for the deposit on their first house?
How long will it be before someone says that this is Daily Mail corner?
There will always be tenants in arrears so what would be more useful is an honest study into why tenants don't put a priority on paying their rent.
Not to mention smoking, drinking, lottery, take-aways, unnecessary car journeys, luxury Sky package for the TV . . .
No tenant is FORCED into debt by high rent.
A 2.4% increase in rent does not explain why tenants are 11% behind with their rent ( ( £8400/£924)X100)
2.4% or the average rent is £201.60 so the other £722.40 is being spent on other non-rent items.
It is right and proper to highlight that some tenants are struggling to pay their rent but surely it is wrong to suggest that rents should not be allowed to rise in accordance with demand.
I am of a generation that was educated to budget and live within my means, the priority for wages was rent or mortgage first, then food and water then luxuries such as heating and hot water.
Perhaps it it time to understand that a 3G capable mobile phone and 24/7 connection to social media sites is not one of life's essentials. £420 PA (the cost of a typical smart phone contract) is more than enough to cover the inflationary rise in rent.
If social networking is more important to tenants than accommodation, they have a choice, find somewhere they can afford.
I wonder where the tenants they had contact with live? We have a large single portfolio of properties, 120, in one of londons more deprived area. Lots of low income families, a handful of benefit claimants, single mums etc. Average rent is £850 pcm but we don't have a huge problem with arrears.
Admittedly there are some greedy landlords out there but people need to manage their income better.
People who can't manage money don't just live in private rental properties. I'd be willing to bet that the majority of the 10,000 people who contacted them have all the normal wide screen tvs, all the kids will have the latest x box etc, £100 sneakers etc, pets (there are always pets) Why is it always the landlord' fault that people can't manage their income?