Rising rent prices push people into debt
Rising rents have prompted a record 12,000 tenants who are struggling with arrears to contact a debt advice charity this year.
The Money Advice Trust (MAT) said the number of calls it had dealt with about rental arrears between January and August was the biggest in the 26-year history of its National Debtline.
The share of its clients who have fallen back with their rent is also increasing, and stands at nearly one in 10, compared with eight per cent last year and six per cent five years ago.
For the first time, people who rent their home now account for more than half of the total calls that the National Debtline receives, meaning tenants are also becoming mired in a broader range of debt problems, MAT said.
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The charity warned of a "dangerous spiral", with tenants sinking further into debt as increased demand in the sector pushes their rents up even higher.
The rental sector has become overheated as people struggle to get on the property ladder, either because they cannot raise the 20 per cent deposit often demanded by lenders or meet their toughened borrowing criteria.
A report by the Yorkshire Building Society found that would-be first-time buyers face spending more than eight years saving for a typical deposit of £26,000.
As more people remain in the rental market for longer, the increase in demand means that rents are pushed up further and tenants face an even tougher time meeting their payments.
Rents rose for five months in a row to reach a new high in August of £734 on average a month, according to a recent study by LSL Property Services.
Joanna Elson, chief executive of the Money Advice Trust, warned that sharp jumps in rents could push some households "over the edge".
She said: "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."
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