Credit, collections & insolvency news
UK household budgets continue to be stretched, with particular pressure coming from housing expenses.
The challenge of affording a place to live and call home remains one of the major stretches on UK household budgets, with difficulties being faced across the board; for those renting, hoping to buy, or those keeping up with their mortgage.
In May 2024, the average housing benefit award was £136.03, with the highest average payment £231.95 and the lowest £79.23. However, with the median rent (excluding London) at £1,319 in July 2024, it seems clear that this benefit is unable to keep pace with increasing prices. Against this backdrop, landlord possession and mortgage possession claims have both increased in Q2 2024 compared to the year previous, at 35.9% and 9.5% respectively.
Meanwhile for those looking towards buying, in the year 2023-24, Local Authorities across the UK sold 6,275 properties to tenants, a figure 64% below the 2007 high of 17,684, despite maximum discounts available increasing in the following years. HM Land Registry reports that the average first-time buyer house price in Great Britain during June 2024 was £241,502. With a deposit at the 2023 rate of 19% of the total purchase price, this would equate to £45,885, or 127.5% of the average UK salary.
In July 2024, the ONS reported that the greatest upward contributor to CPI change was from housing and household services, while in the same month, Citizens Advice say they answered 254,475 enquiries, a 10.1% increase on July 2023. Within this total, debt represented 47,904 issues, an increase of 15.6% on July 2023.
The last few years have been incredibly tough on the budgets of countless UK households and this month’s figures show this again, with far too many struggling with the simple costs of having a home or with taking the big steps required to move towards owning and maintaining one. Circumstances clearly remain deeply challenging right across the UK and while some measures of help are available, these seem to often be struggling to keep pace with the needs they’re designed to meet.
Recent months have seen some small signs of positivity, but with the new government warning many things may get worse before they get better, finding the way forward to improving this outlook will be a considerable challenge. Alongside the vital work we continue to do each day, we will keep strongly advocating for options which will improve outcomes for consumers and help the UK increase its Financial Wellbeing.
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