Defaults to surge as rents go on credit cards

Permalink: Defaults to surge as rents go on credit cards
by Gill Montia

Landlord Assist is warning that tenant defaults could soar in the months ahead amid reports that over the past year, up to one million households have borrowed money on a credit card to pay their mortgage or rent.

The arrears and eviction specialist’s comments refer to research from Shelter published earlier this week, which present a disturbing picture of large numbers of people taking “desperate measures” to keep the roofs over their heads.

The survey involved 2,022 households and the problem was most alarming in London with 12% of respondents meeting housing costs with credit card debt.

Working-class professionals were worst afflicted with 8% using credit cards this way.

However, 4% of middle-class professionals admitted they had been forced to meet bills by paying with a credit card.

Landlord Assist managing director, Graham Kinnear, comments: “By paying the rent with credit cards tenants are effectively swapping one debt for another.”

He adds: “The longer this trend continues the more we will see people struggle to cover their rents and end up in significant arrears with their landlords.”

Meanwhile, Shelter’s director of policy and campaigns, Kay Boycott, says: “It is absolutely vital that every single person using credit cards in this way seeks advice urgently to get the help they need to ensure they don’t lose their home.”

She recommends a visit to one of Shelter’s advice centres, where expert advice is available free of charge.