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Private renters more likely to be in problem debt than general population – StepChange

  • 23/05/2023
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Private renters more likely to be in problem debt than general population – StepChange
People who are renting privately are more likely to be in problem debt than the average person, a survey from a debt management charity has found.

StepChange’s Trapped In Rent report found that 15 per cent of private renters were in problem debt, compared to eight per cent of the wider population. 

The proportion of renters in problem debt was also up from 11 per cent in January, which equates to a rise from 800,000 people to 1.1 million. 

Problem debt is described as when someone is unable to afford their debt repayments. 

The survey revealed that 46 per cent of private renters in arrears found repayments unaffordable. 

StepChange noted that nearly a third, 32 per cent, of its clients who were in vulnerable circumstances were renting privately.  

Housing issues associated with private renting are having an impact on the wellbeing of tenants, as indicated by the 75 per cent of renters who said they or their family had been negatively impacted. 


Financial barriers 

Two thirds of the 2,120 adults polled said they struggled to or could not afford their rent or mortgage. This was higher among private renters, with 73 per cent of respondents citing struggles or being unable to afford their rent. 

Some 52 per cent of all respondents said their debt burden had affected their ability to rent or buy a home, saying this was usually down to poor credit or being on benefits. 

The survey also found that renters were spending a larger proportion of their income on rent at 37 per cent, compared with mortgagors who spend 27 per cent of their income and social renters who spend 29 per cent. 

Private renters also found that their debt burdens and access to benefits held them back, with 41 per cent saying being a recipient of government support was a barrier and 52 per cent saying their access to housing was negatively impacted by financial difficulties. 

Being in receipt of benefits appeared to not go far enough for private renters either, as 78 per cent who received housing support said it did not cover all of their rent costs. Some 82 per cent of the same group said they struggled to afford their rent. 


A competitive market 

The rental market is becoming more competitive, responses suggested. 

A fifth of private renters who looked for a new home in the last 12 months said they were asked to pay more than two months’ rent in advance, while 52 per cent were asked to bid for a property. 

After bidding, just 28 per cent were successful in securing the property. 

Richard Lane, director of external affairs at StepChange, said: “Everyone deserves to live in a house they can call home, but this is becoming increasingly out of reach for a growing number of private renters. Against the backdrop of a frenzied rental market, where bidding wars, sky-high deposits and rising rents are commonplace, those who are financially vulnerable are often left with no choice but to take on unaffordable, insecure, poor-quality accommodation just to keep a roof over their heads. 

“The government’s Renters’ Reform Bill will rightly withdraw landlords’ rights to carry out no-fault evictions, but there is more to do to protect those who should be in socially rented accommodation but have no hope of accessing it. Unless we see benefits that cover the real cost of renting, alongside strengthened rules that protect financially vulnerable tenants who fall behind on their rent, the cycle of debt and housing insecurity will be doomed to repeat itself for millions of people.” 

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