Private renters are almost twice as likely to be struggling with problem levels of debt as the general population, with a sharp rise in the numbers in serious financial difficulty since January, research shows.
The figures come against a backdrop of private rents in the UK hitting record highs, and days after the government announced a shake-up of the sector to tackle the “injustices” that many tenants are facing.
The debt charity StepChange, which issued the polling data, said that “with so many renters in financial difficulty”, stronger protections for those who fell behind with their rent were required or else people would be left vulnerable to “hair-trigger eviction”.
It said that while the renters’ reform bill announced last Wednesday was welcome, it did not go far enough, as many financially and otherwise vulnerable tenants faced challenges that would not be addressed by the proposals.
The private rented sector was now “unaffordable, inaccessible and insecure for those on the lowest incomes, leaving them at high risk of problem debt, poor mental and physical health and prolonged housing insecurity,” the charity said as it issued a report.
It also published a YouGov poll showing that 15% of private renters – 1.1 million people as of this month – were in problem debt, compared with 8% of the general population. The charity added that this number had risen “sharply” – by more than a third – since January, when it stood at an estimated 800,000 people, or 11% of private renters.
Signs of financial difficulty include using credit, loans or an overdraft to make it through to payday, falling behind on essential household bills, using credit to keep up with existing credit commitments, and getting hit by late payment or default charges, said StepChange, with those in severe problem debt typically displaying three or more of those signs.
The research also found that half of all private renters – about 3.7 million people – had had their rent increased in the last 12 months, while more than 1.2 million said they were using credit to make ends meet.
Many have described the private rented sector as being in crisis, which Michael Gove, the housing secretary, appeared to acknowledge last week when he said: “Too many renters are living in damp, unsafe, cold homes, powerless to put things right, and with the threat of sudden eviction hanging over them.”
The number of households renting in England more than doubled between 2001 and 2021, the latest census revealed, and a string of surveys have indicated that typical private rents have hit new highs. Earlier this month the estate agent Hamptons said tenants in Great Britain were now typically paying 25% more than they were at the start of the Covid pandemic.
Meanwhile, experts say severe shortages of rental properties have led to intense competition for what is available, with queues for viewings, desperate renters paying over the odds, and some landlords insisting on a year’s rent in advance.
StepChange’s report stated that one in five private renters who had tried to find a new home in the last 12 months said they were asked to pay more than two months’ rent in advance. More than half were asked to bid on the property they were trying to rent, and only 28% were successful, it added.
The charity’s client survey found private renters “struggled with the affordability of their homes more than any other housing tenure”. Average monthly private rent payments were found to be almost double those in the social sector, and 39% more than average mortgage payments.
The reforms outlined by the government last week will ban no-fault evictions but also strengthen landlords’ rights to throw out tenants for antisocial behaviour.
The Department for Levelling Up, Housing and Communities said at the time that, as a result of its package, 11 million tenants across England would “benefit from safer, fairer and higher-quality homes thanks to a once-in-a-generation overhaul of housing laws”. The department was approached for comment.
