Tenants ‘getting by third’ rely on credit to cover their ‘increasingly unaffordable’ rent

A third of tenants have used some type of credit to cover the cost of their rent in the past year, new figures show.

It’s the latest evidence of how record high rents and the cost of living crisis are taking their toll on renters.

And it has prompted Peter Tutton of StepChange – the debt relief organization that carried out the research – to describe the rental sector as ‘increasingly unaffordable’ as tenants ‘scavenge’.

According to the latest survey, a third of tenants have used some type of credit to cover the cost of their rent

He said: “We have reached a point where renting in the private rental sector is becoming increasingly unaffordable.

‘Yet the growing scarcity of social housing means that more and more financially or otherwise vulnerable people have no choice but to do so.

‘Soaring rents and wider pressure on the cost of living are leaving millions of private renters struggling to make ends meet or relying on credit to pay their rent.’

A total of 31 percent of private renters have used some form of credit in the past twelve months to ensure they can afford their rental payments. This is an increase from 28 percent in January 2024, according to the survey of more than 2,000 people.

The survey also found that half of renters have found it difficult to meet their bills and credit obligations in recent months, compared to 40 percent of all adults and 44 percent of all mortgage holders.

Meanwhile, one in three private renters have cut back on essential spending in the past 12 months, compared to one in four adults in Britain, it has been found.

It follows the second reading of the Renters (Reform) Bill in the House of Lords.

The legislation brings about the biggest change in the private rental sector in decades.

However, many questions remain about the changes, including a timeline for the abolition of Section 21 notices, or so-called no-fault evictions.

Government data released earlier this month showed that 2,682 households in England were evicted as a result of Section 21 evictions between January and March – an increase of 19 per cent in a year and the highest number in six years.

Figures from the Ministry of Justice show that a further 7,863 landlords in England launched Section 21 proceedings against their tenants in that period, an increase of 15 per cent in a year.

Half of renters have had difficulty meeting bills and credit obligations in recent months

Half of renters have had difficulty meeting bills and credit obligations in recent months

Mr Tutton added: ‘Even with the Renters (Reform) Bill, tenants are not given effective legal protection against eviction if they do end up in problematic debt.

‘While it is important that this bill is passed with a clear timeline of when Section 21 will end, we would like to see changes that would increase safety for private tenants, with protections against eviction that mirror those already in place for mortgage providers and social housing. tenants.

‘In the long term we need to see a commitment to making housing more affordable and a clearer plan from the government to reduce the risk of financially vulnerable tenants losing their homes due to rent arrears.’

A Section 21 notice allows landlords to legally evict tenants without giving a reason, creating uncertainty for those renting the property.

However, the prospect of the abolition of notices has raised concerns among landlords, who fear they may not be able to take possession of a property when needed.

Some landlords may decide to leave the market and sell if the Article 21 ban is introduced.

Official data shows the latest average rental prices in Britain from January 2015 to April 2024

Official data shows the latest average rental prices in Britain from January 2015 to April 2024

Mr Tutton’s comments come as the Office for National Statistics revealed that the average rent in Britain rose by 8.9 per cent in the 12 months to March this year.

They reached an average of £1,293 in England, £730 in Wales and £952 in Wales. In Northern Ireland, average rents reached 10.4 percent in the 12 months to February this year.

However, the pace of growth has slowed from a record high of 9.2 percent in the year to March and marked the first slowdown in the annual inflation rate since December 2023.

North London estate agent Jeremy Leaf said: ‘It’s a bit shocking to have these issues laid bare in black and white, but not that big of a surprise when you consider what we see in our offices.

Tenants are having a hard time, especially those looking for new housing

‘Tenants are having a hard time, especially tenants who are looking for new housing.

‘However, this has meant that a larger proportion than usual have renewed existing schemes where possible, as many landlords, aware of the longer vacancies and the importance of retaining good tenants, have chosen to keep the increases under control.

“On the upside, if there is, we’re seeing a little more real estate additions and inflation moving in the right direction, which will help stop the acceleration we’ve seen in rental prices, especially in the mid to upper last part of the past year. year.’

And Harriet Scanlan, from estate agency Antony Roberts in Richmond, said: ‘The supply of rental properties is lagging behind demand, keeping rental prices robust and tipping the balance in favor of landlords.

‘Landlords continue to benefit from stable rental income and minimal to no vacancy periods, despite a slight increase in the number of properties available for rent, especially in areas popular with commuters.’