Household Bill Arrears Surge: A Challenge for Property Investors and Tenants Alike
StepChange debt charity finds that bill arrears now jump by 25%. People who seek debt help show higher arrears. The economy stays tough. Property investors must watch these trends. This holds true for those who work with House in Multiple Occupation (HMOs).
The Rise in Household Bill Arrears
The average client now owes £3,911 on household bills. Clients once owed £3,124 in 2023. This rise shows many households face more cost issues. Clients’ total debt climbs by 7% from £16,706 in 2023 to £17,936 today. Mortgage arrears grow fast, rising 69% from £6,054 last year to £10,239 now. Such changes increase worries for both landlords and tenants in HMOs.
Sector-Specific Increases
Energy arrears grow 28% year on year. Figures show energy arrears rise from £1,485 in 2022 to £2,340 last year. Council tax arrears grow by 14% to reach £1,972. These rises put more pressure on tenants. Fewer clients now list living costs as the main debt reason. Many people still work to recover from past hard times. For investors, this may bring more tenant moves and empty homes. The result can cut into rental earnings in HMOs.
Impacts on the Property Market
Investors in HMOs must see the rising debt load. Mortgage arrears grow fast. Landlords may face more delays or missing rent. They can show care by providing flexible rent plans or working with local groups. Such steps can cut risks tied to higher arrears. In turn, close ties help both landlord and tenant.
The Future Economic Landscape
The spring statement comes soon. It may bring spending cuts and tax rises that affect many. Politicians work hard to calm the economy and help those at risk.
Property investors should note new rules and economic shifts that change rental markets. Knowing local finances and tenant needs helps fill homes and keep rent steady.
Conclusion
StepChange data shows a tough scene for tenants and property investors. High household bill arrears put strain on rent stability.
Landlords must watch closely and find ways to help tenants in these hard times. As the economy shifts, staying alert and ready proves key for property investors.
Sources
- StepChange Debt Charity. "2024 Debt Statistics." StepChange.
- MoneySavingExpert. "Spring Statement Overview." MSE.
- Rightmove. "Stamp Duty Report 2024." Rightmove.
- Financial Times. "National Grid Statement on Heathrow Power." FT.
