What to do if you're struggling to pay the rent

by Laura Shannon on 04 July 2012  |  3 comments
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Rent arrears could put you at risk of losing your home so if you're having problems paying, take action early.

More than 100,000 people renting their homes were in ‘severe arrears’ in the second quarter of 2012, with tenants battling against the tide of rising rent, living expenses, stagnant wages and redundancy.

Severe arrears relates to tenants who owe more than two months’ rent. The figure is an 8% rise on the previous quarter and a 24% increase compared to a year ago.

The research comes from Templeton LPA - a specialist company that mediates between lenders, landlords and tenants when a mortgage is in default and the property at threat of repossession.

The company says it expects further issues because of a weak jobs market and struggling economy. If you’re one of the many at risk of falling into arrears, read our tenants’ survival guide:

The power of negotiation

If you’re having trouble meeting the cost of bills and rent, discuss the situation with your landlord before you end up skipping a payment.

It’s not an easy conversation to start but an honest and upfront approach is likely to go down better than a halt on rent and no communication. Don’t kid yourself the problem will go away and don’t turn to expensive debt or payday loans as a way out.

Your landlord might consider reducing your monthly rent or agreeing on a new repayment plan until you’re back on your feet. Also, if you’re a reliable tenant, the landlord won’t necessarily want the hassle of finding someone new.

Make simple changes

If you’ve only missed one payment because of a bad month or if you’re coming up short each month by a few pounds here and there, some simple changes could make a meaningful difference.

For example, ask your landlord to switch energy suppliers, or if you’re in charge of household bills you can easily do this yourself. If you’re paying interest on a credit card bill, consider switching to a 0% balance transfer deal to help pay down the debt. Use our comparison tool to find credit card deals. But don’t use a credit card to pay your rent, as the debt will only spiral.

There are lots of cunning ways to keep living costs to a minimum. For example, read about how to save money on your food shopping or find more tips in our weekly Frugal Food blog.

You can use our MoneyTrack service for extra help – it gives a clear picture of incomings and outgoings and helps you to budget effectively.

If your debts are more serious...

You might have to consider moving to an area where rents are cheaper – never an easy change if you have lived in your home for a long time.

If you need to end a tenancy early on a fixed-term contract, your landlord might accept a briefer notice period. You don’t want to fall further into debt and your landlord won’t want to wait longer for payment.

Know your rights

If your circumstances have changed suddenly, perhaps because of redundancy or a relationship breakdown, The National Landlords Association recommends seeking advice about potential benefit entitlement, such as Local Housing Allowance.

However, the group warns that if you fall into severe arrears and haven’t communicated with your landlord, they are entitled to issue a notice and initiate possession proceedings.

Basically this means they can start taking steps to have you legally evicted from your home. After two months you can be ordered by the courts to leave the property.

The exact process for how this happens can depend on what type of tenancy agreement you have.

Many private renters have an assured shorthold tenancy, alternatively you could be an excluded occupier (a lodger living with your landlord) or occupier with basic protection (living in student halls of residence, for example).

You can find more information about contract types, arrears, eviction and your rights on the Shelter website.

More on renting:

Ask these questions before you rent!

Buying is cheaper than renting

How to make a rented house a home