Housing Solicitors

A new report focusing on low-income households and debt levels among social housing tenants has concluded that the government’s austerity measures are impacting severely on the finances of social housing tenants.

Housing News reports that Beyond the Margins by think tank the Human City Institute (HCI) and pressure group Compass has found that social housing tenants are increasingly relying on high-interest credit to survive.

The report is supported by social landlords the Aster Group, Trident Social Investment Group and WM Housing Group – and researchers found that the most likely source of credit among social housing tenants were high-interest payday lenders and other high-interest finance companies.

The report was written to support the Compass “end legal loan-sharking” campaign – loan sharks can soon plunge low-income households into greater debt because of the high interest charged on loans, which many borrowers are unable to repay. However, households desperate for a loan because of cash flow problems often resort to high-interest loans if they are unable to secure a bank loan or have a poor credit history.

Researchers for the report interviewed more than 300 social housing tenants on two housing estates in the West Midlands – and found that stagnant wages, rapidly rising living costs and pressures to take up high-cost credit had contributed to tenants feeling “squeezed” in the current economic climate.

Nearly one-third of those questioned said that their standard of living had fallen in the last two years – and nearly one-half said their standard of living had flatlined.

Few of those interviewed had seen any improvement in their standard of living, the report said.

The report revealed that out of the 300-plus social housing tenants interviewed, four-fifths were surviving on less than £200 per week income – with the average weekly income for social housing tenants just £152.

After tenants had paid for food, fuel and debt repayments, each household was left with just £6.51 per day to cover living costs for all other household members, including children.

Out of those interviewed, two-thirds had no savings to fall back on – and half had less than £1,000 in savings. Only 7% of tenants questioned had more than £5,000 in savings.

Director of HCI, Kevin Gulliver, said:

“Social tenants are struggling under the strain of debt. The survey shows that almost half of tenants are servicing significant debt, despite their low incomes, with average debt repayments taking 20p out of every pound of income.

“Fifty-five per cent of indebted tenants owe over £1,000 – with 19 per cent owing over £6,000 and 14 per cent over £10,000.

“One-third indicate that their debts are unmanageable – with 60 per cent always or sometimes having problems with debt repayments.

“One in five tenants told us that they always have to go without necessities like food to make debt repayments.

“Almost 20 per cent had used a high-cost lender, such as a payday loan company or pawnbrokers.”

Duncan Lewis Housing Solicitors

Duncan Lewis is a leading firm of housing solicitors and can advise social housing tenants and rental tenants on a wide range of housing matters, including:

• Debt management
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