The Inside Edge
Recent reports have shown just how much of the UK are relying on renting their homes while many of those are facing the prospect of having such an arrangement on a permanent basis. As a financial comparative, it’s widely claimed that renting is more expensive than buying and the struggle to maintain payments seems to be getting worse.
A report generated by Receivers Templeton LPA, who comprise part of the LSL Property Services Group, is suggesting that over 100,000 people across Great Britain are more than two months behind with their rent. This represents a significant increase of 24% compared with a year ago and the numbers are at their highest since 2008.
In addition, the number of eviction court orders for tenants increased by 6% in the first quarter of 2012 and by 5% over the figures declared twelve months ago.
Paul Jardine of Templeton LPA suggested that the rise was, in some part due to the increase in the number of rental contracts but that falling incomes and genuine hardship were significant contributors to the final statistics.
“As the private rented sector grows, the number of tenants in dire financial straits is steadily climbing. Falling wages in real terms have been compounded by rising rents, pushing a greater number of rented households over the edge financially,” Mr Templeton said.
“With the instability in the labour market and wider economy, and public sector cuts still to come, the section of renters in multiple months of arrears is likely to continue its expansion.”
Meanwhile, the Housing Organisation Shelter are claiming that the situation is being compounded by higher rents that are rising towards unaffordable levels.
“This is yet more evidence of the crushing impact rising rents and stagnating wages are having on family finances,” said Shelter’s Kay Boycott.
“Shelter research found that average private rents are now unaffordable for working families in more than half of England, with many paying up to half of their income each month. And with homeownership out of reach for so many, hundreds of thousands of families are beginning to realise renting looks set to be a way of life, not just a temporary stopgap.”
In recent weeks, there have been calls from Shelter and others for the government to look at ways in which they can overhaul the rental sector. The findings from Templeton LPA cannot differentiate between those who are hit by higher rents compared to others who have lost their job or are suffering financial issues due to other factors. Everyone does seem to be agreed however that the statistics can only get worse over the course of the next few months.