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Record House Prices Pile Pressure on UK Households

Record rents of more than £1,000 a month and the average house prices surpassing £250,000 are increasing the pressure on households already facing a cost-of-living crisis thanks to both the upsurge in energy prices and the ongoing conflict in Ukraine.

Plunging more and more people into debt, the UK housing market is steadily becoming inaccessible, yet householders and potential buyers seem accepting of the fact that they must put themselves in debt just so they can buy or rent a house.

But what is the wider context of these rising house prices?

Record House and Rent Prices Plunging People into Debt

Data from the tenant referencing agency HomeLet showed the average UK rent rose to £1,069 a month in February, up 8.6% on the same month of last year when the figure stood at £984.

In addition, separate figures from the mortgage lender, Nationwide, showed house prices also hit a significant high during February, with the average surpassing the £260,000 mark for the first time since records began.

On average, house prices have gone up by almost £30,000 in the space of 12 months – the biggest increase since records began 30 years ago. In short, the cost of buying a home is now equivalent to 6.7 times average earnings.

But how is this increase plunging aspirational homeowners into debt as they pursue one of life’s basic necessities?

Increased House Prices Lead to a Rise in Debt

Most borrowers have already seen their monthly costs go up in line with this most recent increase, and with housing costs being most people’s biggest monthly expense, there’s no denying that these are precarious times.

When asked to comment, Osama Bhutta, Director at the charity, Shelter, said: “When other bills and essential costs shoot up, it piles more pressure on to households whose finances are already stretched too thin.”

“Our emergency helpline is taking call after call from people who just don’t know how they’re going to keep paying sky-high rents and make ends meet. People on lower incomes are being squeezed so hard they’ve got nothing left, and when people can’t afford their rent, they face eviction and the very real threat of homelessness,” he added.

With more and more household already lending more to make ends meet, an increase as substantial as the energy crisis, for example, is plunging people into debt – and substantial debt too.

Indeed, as new and seriously higher energy bills start to filter through, there will come a point when paying rent, bills or even getting on the property ladder in the first place, will feel not only like a step too far for some, but also an unachievable goal as many will have amassed so much debt that it’ll be literally impossible to do so.

Trust The Debt Recovery Experts

Established in 2009, our specialist private debt recovery team are experts in the field of debt recovery, be it mortgage or rent arrears. Ahead of an expected wave of mortgage and rent deferments, we are expected to be recovering a substantial number of debts ran up when people have fell behind with their mortgage payments.

With over 75 years’ combined experience in the industry, if your debt is over £1,000, we can act almost immediately when it comes to recovering a debt of any size over the threshold.

That said, if you’re a business and are owed money and want to get it back, take decisive action and instruct Cobra today on 0151 526 4222.

You can also email us at admin@cobrafinancial.co.uk.

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