According to Shelter (Britain’s housing and homeless charity), nearly one in five rent or mortgage payers has borrowed money to cover their housing costs and that a shocking two per cent—the equivalent of nearly a million people in Britain—said they had taken out a ‘payday’ loan to help pay the rent or mortgage.
Shelters research concluded that as many as one in four of us would feel too ashamed to ask for help if we couldn’t cover our housing costs—and even more wouldn’t admit their problems to family or friends.
Campbell Robb, chief executive of Shelter, said, “Sky-high housing costs, stagnating wages and the high cost of living have taken their toll. The economy as a whole might be on the up, but losing our home could now be a frighteningly real prospect for any one of us. Our message today is don’t keep your worries to yourself: Shelter’s expert advisers can be the difference between keeping your home and losing it.”
Payday Loans are designed for short-term borrowing but people who default on their payments are subjected to high fees that can raise the cost of borrowing even further.
Russell Hamblin-Boone, chief executive of the Consumer Finance Association, which represents major short-term lenders, said: "While it is of some comfort that the figures haven't increased since last year, there are still too many people using short-term loans to manage larger debt problems.
"We advise anyone who is regularly struggling to pay their rent or mortgage not to try and borrow their way out of trouble. Responsible lenders will help you with a debt repayment plan."
Shelter said it dealt with just under 9,000 calls to its helpline from people struggling to pay their rent or mortgage last year, up a third on the previous year.
Currently, these short-term loans are under investigation of a Competition Commission.