Credit, Collections & Insolvency News
The cost of affording a place to live and call home is placing significant pressure on all kinds of different UK household budgets.
Steep price rises in all areas of the housing market, home ownership to renting, are creating an additional burden on already-pressured household budgets across the UK. Renters in particular are increasingly vulnerable to the rising cost of living, with multiple advice agencies (Citizens Advice Bureaux, StepChange Debt Charity, Christians Against Poverty) all reporting that renters, private and social, are the largest cohort receiving advice. The median private rent across the UK in April 2024 stood at £1,293 per month (£15,500+ annually) while in London this figure stood at £2,070 per month (£24,840 annually.)
Meanwhile, house prices continue to rise, with HM Land Registry noting a 1.8% increase in the average UK house price in the year to February 2024. This has unsurprisingly had a knock-on effect on the burden of mortgage debt, as the average full-time UK employee in the UK can expect to spend around 8.3x their annual earnings on purchasing a home. Nonetheless, the Help to Buy ISA scheme, introduced in December 2015 and closed to new applications in November 2019, is now reported to have supported 592,105 property completions in the seven years to December 2023.
In March 2024, 21.8% of UK adults reported that they were finding it either fairly or very difficult to manage financially, with these findings borne out by increasing signs of housing indebtedness. Both mortgage and landlord possession orders are on the rise, with the equivalent of 199.5 landlord possession orders made every day in Q1 2024. There were also 29,991 individual insolvencies reported in England and Wales in the three months to April 2024, equivalent to 333 people per day.
Recent months and even years have been incredibly tough on the budgets of countless UK households and this month’s figures reinforce that, with far too many individuals and families struggling to even have a home, let alone maintain one. Circumstances clearly remain deeply challenging right across the UK, with too many having to face the kind of decisions they shouldn’t.
Now with an election on the way, finding the way forward to face down and improve these and other financial areas will be considerable challenge for the next government. Alongside the work we continue to do each day, we will keep strongly advocating for options which will help the UK increase its Financial Wellbeing.