More tenants are struggling to pay rent

Posted in 'Personal Finance' by Amy Flower

15 June 2012

The Consumer Credit Counselling Service (CCCS) has witnessed a 27% rise since 2010 in the number of tenants that have requested help and advice regarding rent arrears, taking the total number of requests to over 10,000 people.

The reason that CCCS believes that the increase has occurred is due to rents rising against no commensurate increase in wages. Increases in utility bills and food will also be having an impact on tenants, which in the most extreme of cases can lead to a choice between paying rent or buying food.

This is not just affecting the private rental sector, where average rent arrears range are in the region of £760 to £924, but there are also reports of help requested by tenants in housing association and council properties, where average rent arrears range from £622 to £705. Those struggling to pay rent has increased from 10% last year to 12% this year.

The advice given on the CCCS Website is to try to repay rent arrears as soon as possible as well as keeping up to date with all other monthly payments.

To calculate how much you may have available at the end of each month, CCCS says it is advisable to make a list off all your income and expenditure in a table, prioritising rent or utility arrears and food over non–priority debts such as credit cards, loans or mobile phone bills.

Not making your monthly repayments to your creditors will have serious detrimental impact on your credit report, that can harm your ability to obtain credit for the subsequent six years, if not longer, depending on when you close the accounts or whether defaults are recorded by the lender.

It is best to try to make some repayments to your creditors and if you are in a position to do so, try to factor in making payments for each of your accounts, even if it is the minimum amount required. The golden rule is always to talk to your lenders to tell them that you are having problems, as the amount of flexibility given is always more if the call comes from you, rather than the other way round .

At this stage, it would be advisable to use any credit you have available very sparingly to try and reduce or prevent the situation from worsening and always ensuring that the minimum monthly repayments are made on time.

You can get further advice from the Government Direct website.

Amy Flower is a Credit Analyst at checkmyfile and has a degree in law. She can be contacted at amy.flower@checkmyfile.com