Rent price increases are leading to increased debt, according to the Money Advice Trust.
According to its latest figures, the number of calls to the charity’s National Debtline service from people with rent arrears has “exploded” 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 per cent.
Calls from people with rent arrears have increased 28 per cent over the last two years, and nine per cent 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.
Additionally, figures suggest 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.
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.
“Many people’s budgets are tight already with stagnant earnings growth and inflation above the Bank of England’s two per cent target. Sharp jumps in renting costs can push individuals and households over the edge and into an unmanageable situation.
“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.”
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