Save, make, understand money

Household Bills

Private renters more likely to be in problem debt than wider UK population

Nick Cheek
Written By:
Nick Cheek

People who are renting privately are more likely to be in problem debt than the average person, a survey from a debt management charity has found.

Charity StepChange’s Trapped In Rent report found that 15% of private renters were in problem debt, compared to 8% of the wider population. 

The proportion of renters in problem debt was also up from 11% in January, which equates to a rise from 800,000 people to 1.1 million. 

Problem debt is described as when someone is unable to afford their debt repayments. 

The survey revealed that 46% of private renters in arrears found repayments unaffordable. 

StepChange noted that nearly a third  of its clients who were in vulnerable circumstances were renting privately. Housing issues associated with private renting are having an impact on the wellbeing of tenants, as indicated by the 75% of renters who said they or their family had been negatively impacted. 

Financial barriers 

Two thirds of the 2,120 adults polled said they struggled to or could not afford their rent or mortgage. This was higher among private renters, with 73% of respondents citing struggles or being unable to afford their rent. 

Over half (52%) of all respondents said their debt burden had affected their ability to rent or buy a home, saying this was usually down to poor credit or being on benefits. 

The survey also found that renters were spending a larger proportion of their income on rent at 37%, compared with mortgagors who spend 27% of their income and social renters who spend 29%. 

Private renters also found that their debt burdens and access to benefits held them back, with 41% saying being a recipient of Government support was a barrier and 52% saying their access to housing was negatively impacted by financial difficulties. 

Being in receipt of benefits appeared to not go far enough for private renters either, as 78% who received housing support said it did not cover all of their rent costs. More than four-fifths (82%) of the same group said they struggled to afford their rent. 

A competitive market 

The rental market is becoming more competitive, responses suggested. 

A fifth of private renters who looked for a new home in the last 12 months said they were asked to pay more than two months’ rent in advance, while 52% were asked to bid for a property. 

After bidding, just 28% were successful in securing the property. 

Richard Lane, director of external affairs at StepChange, said: “Everyone deserves to live in a house they can call home, but this is becoming increasingly out of reach for a growing number of private renters. Against the backdrop of a frenzied rental market, where bidding wars, sky-high deposits and rising rents are commonplace, those who are financially vulnerable are often left with no choice but to take on unaffordable, insecure, poor-quality accommodation just to keep a roof over their heads. 

“The Government’s Renters’ Reform Bill will rightly withdraw landlords’ rights to carry out no-fault evictions, but there is more to do to protect those who should be in socially rented accommodation but have no hope of accessing it. Unless we see benefits that cover the real cost of renting, alongside strengthened rules that protect financially vulnerable tenants who fall behind on their rent, the cycle of debt and housing insecurity will be doomed to repeat itself for millions of people.”