A charity, the Money Advice Trust, says that Britain has a looming rent debt crisis on its hands. More than half the calls received at the National Debtline are from people behind with their rent.
The charity reports receiving 20,000 calls in the first nine months of this year from people behind with their rent – a 37% increase from two years ago.
Chief executive Joanna Elson said:: "Rent arrears are the fastest growing problem we help people with at National Debtline."
Separately, a new report by the National Housing Federation claims that rising rents are forcing 310 working people every day to start claiming housing benefit.
The report, entitled “Home Truths”, says this has cost taxpayers an extra £1.7m a day since 2009 – and a total of £12.1bn on housing benefits. The report says that in the last four years, the number of employed housing benefit claimants has risen 104%.
The report predicts that by 2020, house prices will have risen to the point that an entire generation will be forced to rent for life. However, it also predicts that rents will rise by an average of 39%, with further bills to be picked up by the taxpayer.
It says that half of tenants’ disposable income is currently taken up by rent, but that in ten years’ time the proportion will rise to 57%.
David Orr, chief executive of the National Housing Federation, said: “We hear a lot about ‘making work pay’, but a decent job won’t even cover the cost of a home in England.
“Billions of pounds of taxpayers’ money is wasted, lining the pockets of private landlords, when it could be better spent building more homes people can afford. Relying on the private rented sector so heavily is a costly sticking plaster rather than a solution.”
He added: “We need to address the problems of the housing market now, before another generation is left locked out and reliant on taxpayers to keep the roof over their head.”
The study also warns that England’s recovery after the recession is ‘distorted’, and that while London flourishes, other communities are at a standstill.
Comments
Well said EW. Councils are jumping on the Shelter bandwagon and become self appointed lynch mobs with no understand of the actual issues or how to solve them.
"Billions of pounds of taxpayers’ money is wasted, lining the pockets of private landlords"
That is a very cheap generalisation. Mant Landlords only became Landlords due to the financial meltdown in 2008.
A large number have invested their money in property because their pensions have been screwed or they don't trust the banks or see the value of their money fall due to inflation and negligible interest rates.
Good Landlords pay tax and look after the properties and build good relationships with tenants. Not many make huge profits and rather rely upon capital growth which until now hasn't exactly been great.
Tax payers money is wasted on stupid, pointless red tape interference for headline soundbites. Yes housing supply is stifled, but in no small part due to onerous s106 agreements - yes the Council again - which prevent many schemes being viable and even those which are, find it very difficult to get support from banks.
Markets change. We all can see that demand from tenants is falling. The reason rents were so high was because of the banks not lending and the government failing in their promise to make them do so.
Still, as usual, blame the landlord.
This story wasn't the lead on LAT this morning. Instead the lead has been given to more commercial promotion by TPO (YAWN! YAWN! YAWN! Is it time for bed already?)
This story is far more important than anything Hamer has to say but with 3rd spot it will be read by a fraction of the letting Agents who ought to read and understand it. Each will either suffer or profit from it's contents. Perhaps the whole social impact and barometer indications of these passes over the head of most agents and they are happy to react to the market rather than understand it but an understanding of this story and doing something about it will drive Agents profits in the coming years.
Perhaps LAT have not grasped the importance of the content of the story and indeed that is an indication that rather than a conscious walk into crisis the whole industry is sleep walking itself and its landlords into problems that will become a real issue once interest rates rise.
Perhaps the story would make more of an impression if it were not so vague. With about 7.5 Million tenancies spread across Social, Housing Association and Private Tenancies it would be useful to know from who the calls are coming, social through to private.
In respect of Mr Orr, he really ought to understand that Landlords have invested in property, the government has not. If landlords can yield 6% average on Rented accommodation with property bought at market price and within the constraints of legislation, taxation and planning it really is difficult to understand why government, free of those constraints can not see the demand and opportunities open to them and how they can meet those far more cost effectively. There is simply a woeful lack of understanding within government and it’s civil servant advisors, they are reaping the rewards of their own ignorance. As with all things If you can't do it properly yourself you have to pay someone who can.