High rents causing ‘severe’ rent arrears

private rented sector

private rented sectorLiving in private rented accommodation may seem like a cheap alternative for families struggling to raise a deposit for their own property. But recent figures show many households are failing to cope with unaffordable rent, leading to "severe" rent arrears.

Around 100,400 people are now estimated to be more than two months behind on their rent, climbing 8% in the second quarter of 2012, according to research by chartered surveyors Templeton LPA.

It is the most worrying figure since the tenant rent arrears tracker records began in 2008 - 24% higher than the same stage last year.

Households pushed 'over the edge'

"Falling wages in real terms have been compounded by rising rents, pushing a greater number of rented households over the edge financially," said Paul Jardine, director and receiver at Templeton LPA.

"With the instability in the labour market and wider economy, and public sector cuts still to come, the section of renters in multiple months of arrears is likely to continue its expansion."

In the second quarter of 2012, tenancies in severe rent arrears accounted for 2.6% of all tenancies in the private rented sector across England and Wales - a 0.2% increase on the previous quarter.

However, the general level of tenant arrears across the market as a whole has improved, with the amount of late or unpaid rent falling from 9.9% in April to 8.9% by the end of May.

Get yourself back in the black

Shelter, the housing and homelessness charity, recently revealed that average private rents are now unaffordable for working families in over half of England, with many paying up to half of their income each month.

With this is mind, saving money is therefore imperative, even if it is only little amounts. After all, the pennies will soon begin to add up!

Overhauling your monthly bills is a fantastic way to make cutbacks. With some savvy changes here and there you can help lighten your outgoings and go a long way to reducing your outstanding arrears.