Household debt has now overtaken credit as the main source of financial problems

Household debt has now overtaken credit as the main source of financial problems

Household debt has now overtaken credit as the main source of financial problems

Today, the Citizens Advice Bureau released a press release revealing that “households have fallen behind on their essential bills, such as council tax and utilities, by an estimated £18.9 billion”. This means that household debt has now overtaken credit as the main source of financial problems in the UK.

Alarmingly, the implications of this form of debt are far more severe than missing a payment on a loan. If utility bills aren’t paid then services get cut off, missing council tax payments can result in prison sentences and failure to pay rent means tenants can be left homeless.

In fact, the charity also revealed that it “helps 1 person every 3 minutes with bailiff problems”. 

landlord referencing. co .uk, Tenant referencing UK, Tenant Histories, Tenant History

 

While the report emphasises that people with household bill debt “were 37% more likely to be out of full-time employment” there is no doubt about the knock-on effects that these financial difficulties can cause.

My daughter and her partner became ‘accidental landlords’ when they moved in together and rented out one of their properties. Their salaries cover their residential mortgage, their household bills and their living costs – every penny of their income is accounted for before it even hits their bank accounts.

The rent that is paid for the buy-to-let property that covers the buy-to-let mortgage, the additional taxes, insurance and maintenance of the property. If their tenants missed a payment due to prioritising other payments with quick and severe consequences, they would be physically unable to cover off both of their mortgages forcing them into a spiral of debt themselves.  

With the number of ‘accidental Landlords’ on the rise for the third consecutive year, it’s fairly easy to see how the £19 billion worth of household debt can spread and become an even larger problem for even more people.

Paul Routledge, CEO of Tenant Referencing UK and founder of UK tenant Histories who has a large property portfolio says “That’s why it is so frustrating as a professional landlord myself that has experienced hundreds of rent defaults and expensive evictions to speak to landlords that don’t want to pay for rent guarantee insurance. People are willing to insure their cars, insure themselves, their homes, their possessions and even their pets”. So why would any newbie landlord not insure their income? Our recommendation is that any landlord or agent who needs the rent should protect themselves buy a rent guarantee and legal expenses cover.

 

Need our help call us on 0800 9994 994 and let us help you.

 

Keep up with this blog and have your say on the forum @ https://www.landlordreferencing.co.uk/forum/discuss/community-forum/household-debt-has-now-overtaken-credit-as-the-main-source-of-financial-problems/#p34542

 

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Author: News @ Tenant Referencing

Keeping you up to date with landlord and property topics. Send in your story to media@landlordreferencing.co.uk

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