Mortgage debt problem spreading to rental sector
Mortgage debt problem spreading to rental sector
Wednesday 13th August 2008
According to research conducted by Axa, during the last 12 months the number of people in private rental accommodation who have fallen into arrears has hit 13 per cent, with over half of these having done so in the last three months.
Worryingly, the study also found that 95 per cent of renters have no form of income protection to cover their outgoings in the event of a sudden redundancy or change of circumstances.
Mike Keating, managing director of the insurer, said the problems being faced by tenants have been caused by higher energy and food bills as well as stagnating wage growth.
He commented: "The cost of living is rising rapidly and average earnings are not keeping pace.
"And while rental rates appear to have dropped marginally in the last few months it's going to continue to be tough for many tenants."
Signs that the UK's debt problem is worsening come amid predictions that millions of Britons will opt for debt management solutions such as Individual Voluntary Arrangements (IVAs) this year, as higher living costs continue to impact heavily on their personal finances.
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