More than half a million low earners have had to resort to borrowing money via credit cards, overdrafts and other sources to pay their rent during the past year, according to new figures.
The data was published by housing charity Shelter, which said many private renters were having to take on “desperate or dangerous debts” to keep a roof over their head.
It has called on the next government to commit to building 500,000 new “living rent” homes, where the amount paid each month is capped at around a third of a lower-earning household’s income.
The survey by Shelter and YouGov, carried out in April, found that of the almost 1.6 million private tenants falling into the low-earner category, one in three – around 511,000 – had borrowed money during the past year to keep on top of their rent.
The largest number, an estimated 299,000, had used an overdraft, which involves paying interest or fees (or both), while 249,000 borrowed via a credit card. Almost 100,000 tenants used money from parents that they had to pay back, while 91,000 borrowed from other family members or friends to tide themselves over.
Some 57,000 took a loan from a bank or building society, while an estimated 42,000 turned to a payday loan, where the quoted interest rates can be in excess of 1,500% APR, despite price caps being in force. Many of the tenants borrowed from more than one of these sources.
Shelter said it believed the figures were conservative because some of those surveyed declined to disclose their income and were therefore excluded from this category. It added that the research had shown that “huge numbers” of low-earning renters were only just managing to keep a roof over their heads, with 70% either struggling with or falling behind on rent.
With rent swallowing up so much of their income, around 800,000 tenants on tight budgets were not even able to save £10 a month, according to the charity’s analysis of government data.
Anne Baxendale, director of communications for policy and campaigns at Shelter, said: “No family should have to choose between relying on their credit card to keep up with the rent, or moving miles away from their jobs and schools to find a home they can afford. Right now, there’s nowhere for these people to turn, but it doesn’t have to be this way.”
The good news for some is that rents have apparently been falling in parts of the country: in April, lettings agency Your Move said typical rents in London had declined sharply, with new tenants in the capital typically paying almost £100 a month less than their counterparts a year earlier. In March, Countrywide, the UK’s biggest estate and lettings agency, said rents in Britain had recorded their first annual drop for six years.
