Borrowing money to pay the rent is increasing

The housing charity Shelter has revealed that more tenants than ever before are now borrowing on their credit cards just to pay their rent. They reported that more than two million people have used credit cards to pay either their mortgage or rent during the last 12 months, a massive 50% increase on the previous year.

The research involved asking 2,234 people if they had borrowed on their credit card to keep a roof over their heads and 6% said yes, compared to just 4% the year before. Shelter believes the random sample could represent a national figure of more than two million people. The charity is warning that for all but the financially savvy, using credit cards to pay rent is a big mistake. Simply because paying off one debt while creating another is not the solution.

Campbell Robb, Shelter’s chief executive, said “Our research brings into sharp focus the daily struggle faced by millions of people across the country to keep a roof over their head.

“This is a totally unsustainable situation and one which we fear could see thousands more families pushed into the spiral of debt, eviction or repossession and ultimately homelessness. It’s vital that every single person using credit cards in this way takes action to get themselves out of debt and seeks urgent advice from organisations like Shelter, to ensure they don’t lose their home.”

Eviction specialists Landlord Assist say that every landlord needs to take measures to protect their own interests. They highly recommend measures such as careful vetting and full tenant referencing when letting out a property. Taking out landlord insurance will also give protection against the non payment of rent. Landlord Assist is concerned that the problem will only get worse, especially if rents increase later in the year. The VAT increase to 20% combined with the expected rise in interest rates and the Coalition Governments cuts means the impact is likely to put tenants under increasing financial pressure.

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