The debt charity used YouGov to poll tenants and found 53% of renters are struggling to keep up with payments, while one in three (32%) are using credit to afford rent.
The news comes as the Office for National Statistics (ONS) announced that private rental prices rose by 8.7% in the 12 months to October, up from the previous month’s figure of 8.4%.
StepChange is calling for the Government to strengthen the Renters’ Rights Bill to improve protections for private renters experiencing financial hardship.
The study found that almost one in five (18%) private renters have used their overdraft in each of the past three months. This compares to 12% of the wider population. One in five (22%) private renters would not be able to pay any of an unexpected cost of £1,000 without turning to borrowing or seeking help from someone else, compared to 15% of the wider population.
Researchers also found that one in six (15%) private renters have used credit, loans or an overdraft to make it through to pay day.
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Currently, the Renters’ Rights Bill proposes to outlaw no-fault evictions, which StepChange welcomes. But, under the bill, a landlord would still be able to ask the court to automatically evict tenants for other reasons, such as rent arrears.
As a result, the charity is calling for a ‘Tenancy Support Duty’ to be introduced. This would mean if a tenant was struggling with rent arrears due to financial difficulties and had the ability to pay this back, their landlord would have a duty to work with them to resolve their arrears, including trying to agree an affordable repayment plan.
StepChange said that this would enshrine in law that eviction should only ever be a last resort and ensure that financial insecurity doesn’t lead to housing insecurity.
‘Low financial resilience among private renters’
Richard Lane, chief client officer at StepChange, said: “While the new Renters’ Rights Bill will certainly improve protections for private renters, today’s data from the ONS, alongside our latest research, clearly indicate the financial pressure that tenants are under. Private rental prices continue to rise well above inflation, with more and more renters falling behind on bills or relying on credit as a result.
“With such low financial resilience among private renters, one financial setback could quickly knock someone into the red with their rent. Even under this new bill, there are few protections to protect someone in this situation from eviction.
“We’d like to see the bill amended to provide for judicial discretion for eviction on the grounds of rent arrears, supported by the introduction of a Tenancy Support Duty. By putting the power in a judge’s hands, this would also rebalance rights between tenant and landlord.
“Landlords need to be able to recover their properties in exceptional circumstances, but it’s only fair that tenants struggling financially have the opportunity to get back on their feet before losing their home – a measure [that] is already law for the social rented and mortgage sector.”
