Homelessness charity, Shelter, has warned that we face a huge housing crisis over the next couple of months. It says that a combination of massive increases in rent charges and inflation in the cost of bills means that around one person every two minutes will lose their home.
So what is going on, and what should you do if you are struggling with rent or a mortgage?
Threat of homelessnessThe charity says that 630 people a day will get a letter warning them that they are about to lose their home. A large part of the blame is being placed on rising rents, which means they are increasingly unaffordable for many households. Similarly, many landlords are finding it hard to meet their costs and are selling up, forcing their tenants to find somewhere else to live.
However, buying a property does not make you immune from the risk, as a growing number of people are struggling with the mortgage too. This may seem counter-intuitive given that interest rates are at rock bottom. However, families are being stretched by the rising cost of everything from heating bills to grocery shopping, and many are unable to afford the mortgage as a result.
Protect yourselfIf you are falling short with mortgage payments, or facing repossession, Shelter says a number of steps are essential (although this advice applies specifically to England):
1. Speak to your lender and see if they will let you have a temporary payment holiday, pay off the money you owe over time, or add it to the mortgage. They may also let you repay over a longer period or switch to interest-only, reducing your monthly payments. It's in their best interests to sort something out.
2. Consider if your home can make money for you, either by renting it out and living somewhere cheaper, or renting out a room.
3. Look at whether you can get any help from the state. If you don't know how, take advice from an organisation like Shelter or the CCCS.
4. Consider selling up and cutting your losses.
5. Turn up to court. If your case goes this far, you may still save your home if you show up.
6. Seek legal advice so you know what your options are.
7. Don't just hand over the keys. You'll still be liable for the mortgage until the home is sold.
Rental adviceIf you are struggling with rent (in England) it suggests:
1. Talk to your landlord and see if they will let you pay arrears off over time. They may think it is better to have the money eventually than never at all. Don't hide from your landlord or they will feel they have no option other than to take you to court.
2. Prioritise rent payments, as this is always the most important bill you have to pay.
3. Check if you can get any help from the state or any benefits.
4. Don't just move out, as you will still be liable for rent during any minimum contract period or notice period.
5. Talk to an adviser from somewhere like Shelter or CCCS for help with budgeting and if the problem has escalated.
6. If your landlord starts eviction proceedings, get legal advice from a charity like Citizens Advice.