Rental and other costs have increased markedly in recent years. And while rising demand has allowed landlords to increase how much they charge, tenants could soon be pushed to breaking point.
LetRisks has revealed that the overall cost of renting (including the rental payments and heating) for private tenants renting unfurnished property, has increased by 60 per cent in the last 10 years. During this time, however, gross income has only increased by 31 per cent.
The average rent paid by tenants in Britain increased by 2% in 2013 to £854 a month, according to property firm Countrywide. The figures, which are based on analysis of 50,000 rental properties, showed the biggest rent rises during 2013 were in Wales, where the average amount paid went up by 3.8%. In contrast, in Greater London, where rents went up by 3.4% over the year, median incomes were flat and the average rent stood at £1133 a month in December.
The pressure to pay rent and meet all other outgoings has intensified and it is estimated that 1.4 million people in Britain are falling behind with their rent or mortgage payments. A million families are being forced to take out payday loans every month as they struggle to meet the rising cost of living; and 2.8 million people used an unauthorised overdraft to help pay their rent or mortgage, and of those 10 per cent did so every month.
More than half the calls received at the National Debtline are from people behind with their rent. The charity reports receiving 20,000 calls in the first nine months of 2013 from people behind with their rent – a 37% increase from two years ago. It has also been reported that more than 67,000 rental households across the UK now owe more than two months’ rent according to LSL Property Services.
Michael Portman, Managing Director of LetRisks said: “Against a back drop of rising family debt, low wages and rising living costs, it seems family finances are under greater pressure than ever.
“Rent arrears are now the fastest growing debt problem in the UK. These uncomfortable statistics highlight the need for letting agents and landlords to protect their rental income and ensure they carry out thorough references with all new tenants. Times are very tough for many tenants and demand for rental accommodation is on the rise. Landlords and letting agents need to extra vigilant when they take on a new tenant. But a few simple checks will help identify if a tenant is in a good financial position or not.”