Rent Arrears Are Biggest Debt Problem In UK

Tuesday, December 17, 2013
Protect Rental Income

Protect Rental Income

Landlords Without Rent Guarantee Insurance Suffering Financially
As Rent Arrears Increase Again

The Money Advice Trust, the national debt advice charity has reported that tenant rent arrears are now the fastest growing debt problem in the UK. 

Private rented sector landlords who don’t use Rent Guarantee Insurance to protect their rental income are suffering massive shortfalls and their cashflow problem appears to be getting worse. 

The number of calls to the Money Advice Trust’s National Debtline service from tenants with rent arrears has risen year on year since the economic meltdown hit in 2007/8. 

Between January to October 2013, the charity’s free advice helpline received nearly 20,000 calls for help from tenants with rent arrears, compared with just 8,000 over the same period in 2007, an increase of 146%. Calls from PRS tenants with rent arrears have increased 37% over the past two years, and 13% in the past 12 months, more than any other debt type. Additionally, figures suggest tenants have faced a growing number of debt problems, with PRS tenants now accounting for 57% of total calls to the Money Advice Trust’s National Debtline, compared to 43% in 2010.  

Chief Executive of the Money Advice Trust, Joanna Elson, said: “The long-term trend for rising rent prices is clear and its impact on the debt landscape is significant. Rent arrears are now the fastest growing debt problem we help people with at National Debtline, and we are in danger of falling into a rent debt crisis. Housing costs are the most important household bill of all, and to see such increasing numbers of people falling behind on rent payments is indicative of how the cost of living squeeze has hit many families very hard since 2007. We hear from thousands of people every month about the difficult decisions they have to make just to hold their family finances together. The risks of falling behind on rent payments are stark and it is vital anyone concerned about their ability to pay the rent seeks 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 you can also get free, impartial advice from Business Debtline.”  

PRS landlords and letting agents can use rent guarantee insurance to protect their rental income following comprehensive Tenant referencing and background checks, keeping monthly rental income flowing should the tenant experience a sudden change in circumstances.

Find out more about Legal 4 Landlords Rent Guarantee Insurance Here

This was written by Mike Clarke. Posted on at 11:30 am. Filed under Insurance, Referencing. Tagged , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. Follow comments here with the RSS feed. Both comments and trackbacks are currently closed.