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Buy To Let

Renters at higher risk of falling into debt spiral warns charity

Tahmina Mannan
Written By:
Tahmina Mannan
Posted:
Updated:
18/10/2012

The number of households in the UK that are heading into a spiral debt is on the increase according to debt advice charity, Money Advice Trust.

The figures highlight the extent to which rent price increases are affecting households across the UK.

The number of calls to the charity’s National Debtline service from people with rent arrears has significantly increased over the last five years. 

From January to August 2007, the free advice helpline received just over 6,000 calls from people with rent arrears, compared with 12,000 over the same period this year an increase of 99%.

Joanna Elson, Chief Executive of the Money Advice Trust said: “In the current environment it is clearly difficult for people to save the money for a deposit to buy a house and this has led to more people remaining in the renting market for longer.

“Where there is limited supply and greater demand, rising prices will always follow.

“However, rising rent prices are not only making it harder for people to save for a deposit, they’re also pushing more people in debt.

“This is a dangerous spiral; with increasing numbers of people entering the renting market, and fewer people leaving it, it is hard to see how the situation will improve.”

The charity said that the calls from people with rent arrears have increased 28% over the last two years, and nine% in the last 12 months.

Nearly ten per cent of all people calling National Debtline have rent arrears, compared to just six per cent in 2007 and eight per cent last year.

These figures also suggest that renters have faced a growing number of broader debt problems, with renters for the first time accounting for more than half of the total calls to National Debtline.

Elson advised: “Anyone struggling with their finances should seek 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, or if you are self-employed or the owner of a small business, you should contact Business Debtline.”