Average private rents in Britain have soared to record highs, with some cities seeing annual increases of more than 20 per cent. Many of you reading this bulletin will be paying up to half your monthly net salary to a landlord, who then pays a great deal of that to HMRC, who then uses it to pay interest on our bills, which have amassed because many of us cannot afford to live, or at least get a mortgage, which leads to us renting ...
In the meantime, tenants are also grappling with housing shortages, struggling to pull together large deposits and facing precarious renting situations. The Office of National Statistics reported that at the end of 2022, sixty per cent of renters reported finding it difficult to afford their energy bills compared to forty-three per cent of people with a mortgage. Nearly four in ten (39 per cent) of renters reported finding it difficult to afford their rent payments compared to 23 per cent of those with a mortgage.
NTI have just published (Friday 10 February) the latest in our series of 'Consumer Issues' webcasts on CPD TAP, setting out some pretty jaw-dropping numbers. These include those relating to homeowners, who are now facing higher costs and financial strain, as those with a mortgage will come under pressure now that the protection afforded by very low mortgage rates has begun to be unwound. Over 1.4 million UK households face the prospect of interest rate rises when they renew their fixed rate mortgages in 2023.
The Financial Conduct Authority has written to the Treasury Committee to warn that more than three quarters of a million households were at risk of defaulting on their mortgage in the next two years.
The cost of living crisis will have longer lasting effects. Lack of savings means people have less financial resilience against future financial shocks. It is likely that many people who do have a financial cushion will continue to dip into their savings to make ends meet next year. The millions of people who already have no, or next to no, savings to rely on are particularly financially vulnerable. Nine million people in the UK have no savings and a further five million have less than £100. Nearly eight in ten use credit, and 43 per cent of those are now anxious about how much they owe.
Have a lovely weekend.