One in five households have dipped into savings to pay rent or mortgage
More than one in five (22%) households have recently used their savings to pay their rent or mortgage, according to Government figures.
The English Household Survey published by the Department for Levelling Up, Housing and Communities looked at household resilience among homeowners and renters.
It discovered that one in 10 households were behind with at least one household bill in April-May 2021.
But the data revealed that owner occupiers were less likely to be behind than renters, with 3% of outright owners behind with one or more bill, whilst 5% of those buying with a mortgage were behind.
For private renters the figures were much higher – 17% were behind with one or more bill, as were 25% of social renters.
Of those who have dipped into savings to pay their rent or mortgage there was a similar discrepancy between tenures. Renters were more likely than mortgagors to have used their savings for this purpose (29% of private renters and 28% of social renters compared with 19% of mortgagors).
Lewis Shaw, founder of Shaw Financial Services, said: “The likelihood of more and more people who find themselves at the mercy of the private rented sector, being pushed to breaking point by the combination of rising rents, household bills, tax hikes and overall inflation is going to get worse, sadly.”
Paul Neal, at Missing Element Mortgage Services, added: “With Covid, furlough ending, rising fuel and energy prices it’s no wonder people are beginning to struggle. You then have to wonder at what point do they manage to start putting money away towards a deposit for their home?
“With the average property price around £250,000, a minimum deposit would be £12,500 and if you have fallen behind with your bills, there is little point in even looking at this as you will struggle to be accepted by many lenders. Then we wonder why generation rent cannot afford to buy.”