New data amidst the cost of living crisis shows how many of us are struggling to keep up with our outgoings, including rent. Around 700,000 households were unable to pay their rent or mortgage payment in April, according to data from Which?.
Missed housing payments were particularly high amongst renters, with 1 in 20 tenants unable to pay their landlord last month, while 3.1% of mortgage holders missed their payments. In addition, two million households (7.3%) missed or defaulted on at least one mortgage, rent, loan, credit card or bill last month.
Mortgage rates have soared since the government’s September mini-budget, with homeowners and tenants feeling the impact. The Office for National Statistics (ONS) found one in five tenants in private rented properties saw their monthly rent increase by 10% or more between February 2022 and February 2023. In fact, last month, it was reported that average monthly rental prices have hit record highs of £1,190 outside of London and more than £2,500 in the capital, according to Rightmove.
With the Bank of England expected to increase the mortgage base rate again this week, it’s clear that, for those struggling financially, the solution goes way beyond ‘cutting back on Deliveroos and morning coffee runs.’ Of course, making a budget spreadsheet will help give us visibility of our spending habits and cut costs where possible, but the current cost of living crisis goes way beyond an economic squeeze – it’s a public health emergency that is completely out of our control. For some, budgeting just isn’t enough.
So, what can you do if you can’t pay your rent right now? “When renting a property and paying rent, tenants have restricted rights,” explains chartered financial adviser and author of The Money Edit, Makala Green. “However, there are many options for renters if they’re struggling to pay their rent.”
1. Talk to your landlord or lettings agent. You may be able to put a reasonable agreement in place that suits you both until you can afford to pay your rent in full. You may be able to spread the amount you owe across future payments, or agree a repayment plan, which could be easier than paying the whole amount in one go. Your landlord doesn’t have to agree but may prefer to reach an agreement rather than evict. For help and information, contact Citizens Advice.
2. Ensure you’re getting all the financial support and assistance you are entitled to from the government, such as income benefits or universal credit if your income has reduced. To check if you’re eligible for Universal Credit and how to apply, click here. There are also various independent, free and anonymous benefits calculators you can use to check what benefits you may be entitled to – find them here.
3. Apply for a Discretionary Housing Payment (DHP) if you already receive housing benefits or universal credit and need further support with housing costs. DHPs can also help pay a deposit or rent in advance for a new home. Contact your local council to apply.
4. Let your MP know about your situation. There is a current renter crisis due to the increased cost of living, and MPs deserve to know more about it. There are many templates available online to help you draft a simple letter. Find out how to contact your MP here.
5. Don’t be afraid to take personal action and downsize your accommodation or change the location for a cheaper alternative (if possible).
If you need help and advice with the cost of living, there’s a lot of helpful advice on citizensadvice.org.uk, or you can contact one of their advisers on 0800 144 8848 (England) and 0800 702 2020 (Wales).