DEMAND AN END TO POVERTY THIS GENERAL ELECTION
TAKE ACTION
Housing

Renters are twice as likely to fall into problem debt than the rest of the population

One in six private renters are struggling with debt, according to StepChange, in a call for more protections to help struggling tenants

Renters are more likely to fall into debt

Rent increases and the cost of living crisis have hit renters hard. Image: Christian Erfurt / Unsplash

Private renters are twice as likely to fall into problem debt than the rest of society, a new poll has found, in a warning that the new Renters Reform Bill must help tenants in financial difficulty.

Debt charity StepChange said 1.2 million private renters are relying on credit to make ends meet as they face record-high rents and the wider cost of living crisis.

A YouGov poll commissioned by the charity found 15% of private renters are in problem debt – meaning they cannot afford debt repayments – compared to around 8% of the wider population in England, Wales and Scotland.

Last week the government introduced the Renters Reform Bill to parliament to give tenants more security in their homes in England. StepChange welcomed the new legislation but said it will not go far enough for tenants struggling to get by. 

Richard Lane, StepChange director of external affairs, said: “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.”

The situation has worsened for renters in recent months as inflation and rising rents have made it more difficult to cover monthly payments to landlords.

Half of all private renters have seen their rent increase in the last 12 months, StepChange said. The poll found a quarter of private rent increases were over £100 with 4% of tenants experiencing steep surges over £500.

The rising cost of renting meant 36% of respondents had cut back on essentials to be able to afford rent while 18% fell behind on their rent payments. Around 15% fell into arrears on another household bill while 10% turned to credit to help pay their rent.

Overall, there has been a rise in the number of tenants falling into problem debt – 800,000 people were in financial difficulty in January but by May that number had grown to 1.1 million people, StepChange said.

That was having a knock-on effect on wellbeing with two-thirds of tenants who experienced a rent increase reported that it had a negative impact on their mental health.

Get the latest news and insight into how the Big Issue magazine is made by signing up for the Inside Big Issue newsletter

The Renters Reform Bill is meant to give tenants more security by shifting the power dynamic with landlords more in their favour.

The legislation will ban no-fault evictions, which allow landlords to evict tenants without giving a reason, while also allowing renters to keep pets and challenge rent increases.

The bill will also bring in measures to improve the standard of private-rented homes, help for landlords to recover properties from tenants guilty of anti-social behaviour, and introduce a new ombudsman to settle disputes.

Housing Secretary Michael Gove 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.

“This government is determined to tackle these injustices by offering a new deal to those living in the private-rented sector; one with quality, affordability, and fairness at its heart.”

Your support changes lives. Find out how you can help us help more people by signing up for a subscription

However, StepChange warned tenants who are already in financial difficulty will not be protected by the renter reforms.

The debt charity said the new legislation strengthens eviction grounds to remove tenants who have fallen into rent arrears, leaving them at risk of a “hair-trigger eviction”.

Protocols to create affordable repayment plans should be considered to keep tenants in homes, the charity said.

StepChange also called on the government to increase funding to help renters in arrears or to meet one-off costs such as house moves.

Like many other housing and homelessness campaigners, StepChange also renewed a call for housing benefits to be raised to cover the cost of rent.

Article continues below

Current vacancies...

Search jobs

Local housing allowance is meant to cover the 30th percentile of rents in local areas, but research carried out by homelessness charity Crisis and property portal Zoopla last year found 90 % of private rented homes in England were unaffordable for people on housing benefits.

Lane added: “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.”

If your rent is driving you into debt, contact charities like StepChange or Citizens Advice for support or call the National Debtline on 0808 808 4000.

You may also be able to get support from your local council through discretionary housing payments. They are available to cover a rent shortfall, rent deposits or rent in advance for people who need to move home. Contact your local council to see if you’re eligible.

Do you have a story to tell or opinions to share about this? We want to hear from you. Get in touch and tell us more.

Support the Big Issue

For over 30 years, the Big Issue has been committed to ending poverty in the UK. In 2024, our work is needed more than ever. Find out how you can support the Big Issue today.
Vendor martin Hawes

Recommended for you

View all
'It's crisis point': Social housing waiting list will cost next government £205bn to clear
building social housing
Social housing

'It's crisis point': Social housing waiting list will cost next government £205bn to clear

Should we end Thatcher's Right to Buy? How scrapping scheme could help solve UK's housing crisis
Andy Burnham has differing views to Margaret Thatcher on Right to Buy
Right to Buy

Should we end Thatcher's Right to Buy? How scrapping scheme could help solve UK's housing crisis

'Next government must fix our broken rental system': Political leaders told to stand up for renters
renters are demanding the next government protects them from poverty
RENTING

'Next government must fix our broken rental system': Political leaders told to stand up for renters

Is there really a 'clear plan' to tackle UK's housing crisis? Five things we learned from Tory manifesto
Rishi Sunak ahead of the Conservative Manifesto launch
General election 2024

Is there really a 'clear plan' to tackle UK's housing crisis? Five things we learned from Tory manifesto

Most Popular

Read All
Renters pay their landlords' buy-to-let mortgages, so they should get a share of the profits
Renters: A mortgage lender's window advertising buy-to-let products
1.

Renters pay their landlords' buy-to-let mortgages, so they should get a share of the profits

Exclusive: Disabled people are 'set up to fail' by the DWP in target-driven disability benefits system, whistleblowers reveal
Pound coins on a piece of paper with disability living allowancve
2.

Exclusive: Disabled people are 'set up to fail' by the DWP in target-driven disability benefits system, whistleblowers reveal

Cost of living payment 2024: Where to get help now the scheme is over
next dwp cost of living payment 2023
3.

Cost of living payment 2024: Where to get help now the scheme is over

Strike dates 2023: From train drivers to NHS doctors, here are the dates to know
4.

Strike dates 2023: From train drivers to NHS doctors, here are the dates to know