One in Three UK Private Tenants Rely on Credit to Pay Rent Amid Soaring Prices
*September 21, 2023* – A recent survey conducted by the StepChange debt charity highlights the financial strain faced by millions of private renters in the UK, with one in three resorting to credit to cover their rent as housing costs continue to surge. The findings come on the heels of data released by the Office for National Statistics (ONS) indicating a 5.5% year-on-year increase in private rental prices in the UK, marking the largest jump since tracking began in 2016.
According to the YouGov survey commissioned by StepChange, a staggering 38% of private renters have turned to various forms of credit to afford their rent payments. In contrast, only 20% of mortgage holders reported using credit for housing expenses. Furthermore, over a quarter (27%) of private renters have dipped into their savings to meet their rent obligations in the past year, while 23% admitted to rationing heating, electricity, or water usage to ensure they can cover their bills.
Richard Lane, Director of External Affairs at StepChange, expressed concern over the data, noting that private renters appear to be grappling more with living costs compared to mortgage holders. Lane emphasised the need for the government to implement both legal reforms and effective support mechanisms to help people maintain their homes without the constant spectre of debt or eviction.
Nationwide Offers £200 Switching Incentive for Current Account Holders
Starting today, Nationwide is joining the ranks of top banks offering switching incentives to current account holders. Customers who make a full switch to one of Nationwide’s three main current accounts using the Current Account Switch Service are eligible for a £200 reward. To qualify, individuals must transfer a minimum of two active direct debits to their new Nationwide account.
Opening a new account with Nationwide can be done through their website, internet banking, or mobile banking app, and customers can request the switch as part of the application process. In addition to the switching incentive, Nationwide is introducing a regular savings account exclusively for current account customers, featuring an impressive 8% AER/gross p.a. interest rate. Customers can save up to £200 per calendar month in this online-managed account.
Government Borrowing in August Higher Than Expected
Newly released official figures from the Office for National Statistics (ONS) reveal that government borrowing in August exceeded economists’ expectations. Borrowing, representing the difference between government spending and tax income, reached £11.6 billion last month. This marked an increase of £3.5 billion compared to the same period the previous year, making it the fourth-highest August borrowing since monthly records began in 1993.
While experts had anticipated public borrowing to stand at £11.1 billion for August, it remains below the £13 billion forecast by the government’s financial watchdog, the Office for Budget Responsibility (OBR), in March.
Government borrowing often serves various purposes, including stimulating the economy and funding significant projects like infrastructure development. Speculation suggests that the upcoming Autumn Statement may contain new spending commitments addressing concerns such as local council finances and school building safety.
For the fiscal year to date, government borrowing has reached £69.6 billion, reflecting a £19.3 billion increase compared to the same five-month period in the previous year. However, this total is £11.4 billion lower than the amount projected by the OBR.
