Low income households struggling to stay in their homes

7 June, 2013

Low income households are increasingly struggling to keep a roof over their heads according to new figures from StepChange Debt Charity. In recent years the charity has seen an alarming rise in the number of households with annual net incomes of less than £10,000 that are struggling with rent and mortgage arrears, while the amounts owed have continued to rise. 

The charity is raising concerns as these figures have continued to worsen in the first quarter of 2013, before changes to housing benefit and the introduction of the so called “bedroom tax” were introduced.

Rent arrears

In 2009, just 16.9 percent of households in rented accommodation seeking help from StepChange Debt Charity with incomes of less than £10,000 were struggling with rent arrears. In 2012 this figure had risen to 30.8 percent, and in the first quarter of 2013 stood at 34.4 percent. The amount owed in rent arrears by these households has increased from an average of £636 in 2009 to £757 in 2012.

Mortgage arrears

The number of low income households with mortgages who are falling behind on payments has also risen significantly. In 2009, 36.5 percent of this group had mortgage arrears, by 2012 this had reached 43 percent, and in the first quarter of 2013 was 48.7 percent. The average amount owed in mortgage arrears by such households has increased from £2,668 to £2,996 in 2012.

The increases in the numbers of people struggling with rent and mortgage payments has been far sharper among those households with incomes below £10,000 than other groups. 

Delroy Corinaldi, external affairs director for StepChange Debt Charity, said: “Low income households will always be the most financially vulnerable, however the increasing pressure they face in keeping a roof over their heads is a deeply concerning.

“Those people with mortgage arrears may well have suffered an income shock such as unemployment or reduced working hours. It is crucial that these people seek advice at the earliest opportunity.

“Increasing rents and changes to housing benefit risk putting further strain on already vulnerable households, rising household costs and falling incomes may leave many low income homeowners facing the unwelcome prospect of losing their home”.