This is actually a quite alarming story. The Financial Times this week has reported that more and more tenants in the UK have been reduced to using their credit cards to pay their rent.
This problem is most prominent among blue collar, working class families with the figure standing at 8 percent of them having used a credit card to make a mortgage or rent payment in the last 12 months. The figure drops to 4% in the white collar sector.
It is in London where this is the most worrying with 12% saying that they have used a high interest credit card to pay their monthly rent or mortgage. The repayments on these can be quite crippling.
You do not have to be a rocket scientist to work out where the natural progression of this trend ends. Tenants who cannot afford their rent end up having credit card balances to deal with and eventually they are going to hit the wall. This leaves them in a very regrettable position financially and the landlord with a tenant that has no means of paying.
It seems inevitable then that if things continue this way, landlords are going to face a huge rise in rental arrears. A situation that none of us want to see.
