Debt reduction hampered by rent increases ~ Debt Managements and Consolidation

Tuesday 1st February 2011

A study by Paragon Mortgages has revealed that more than half of the landlords they recently interviewed said they were planning to increase the amount of rent they charge by at least four per cent in the coming year.

The website http://www.money.co.uk/ has consequently calculated that this will lead to the average UK rent increasing by £550 per annum, meaning many Britons will be put under further financial strain at a time when money worries are already at the forefront of many people’s minds.This increase is due to the problematic state of the housing market, with many people finding it increasingly difficult to get onto the property ladder. Speaking to moneyworries.co.uk, Hannah Maundrell – head of content at money.co.uk – explained: “The mortgage market has still not really opened up so many people who want to buy have no option but to keep renting. Unfortunately for them, simple supply-and-demand economics means that this pushes up the cost.”This increase in the price of being a tenant is just one of the costs of living set to go up in the near future – along with, among others, fuel and food prices – which will only add to the obstacles barring Britons from paying off their debts. Personal debt in the UK has reached nearly £1.5 trillion, and during the second quarter of 2010 banks wrote off £3.5 billion of consumer borrowing, up from £2 billion during the first three months of the year. Personal insolvency rates have also risen to record levels, and the situation is compounded by the lack of access to credit that the average Briton is currently experiencing.
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