Jan 27, 2023
Half of Britons Struggle With Soaring Cost of Running Households
(Bloomberg) -- Almost half of people in Britain are struggling with a surge in the cost of running their household after inflation hit a four-decade high, a think tank warned.
Some 44% of working-age households were falling behind on rent and mortgage payments in November last year, up from 26% in January 2021, the Resolution Foundation said in a report published Saturday.
The figures, from a survey of 10,470 adults by YouGov Plc, illustrate how the cost-of-living crisis has intensified pressures sparked by the Covid-19 pandemic.
Renters, who are facing the fastest rent increases in a decade, are at the sharp end of the crisis with 8% of private renters falling behind on housing costs and 53% struggling in the three months to November.
The picture looked even bleaker for social renters, as 19% reported falling behind on payments and a further 44% said they were struggling.
This meant many were unable to replace electrical items, or turn on their heating when needed, the survey found.
Mortgage holders, meanwhile, have been battered by an unprecedented string of interest-rate increases from the Bank of England. The central bank is expected to push ahead with a 10th successive hike on Thursday. Traders are pricing in a 25 basis-point rise to 4%, with the benchmark rate projected to hit 4.5% by May.
The share of mortgage holders falling behind or struggling with payments almost doubled from 27% to 50% between January 2021 and November 2022. Despite the sharp rise, the total in trouble was still less than among renters.
“With many renters reaching the limits of already depleted finances, this squeeze is having profound impacts on their household budgets and wellbeing,” said Cara Pacitti, senior economist at the Resolution Foundation.
“As housing costs are set to continue rising, the situation for renters will worsen without further policy intervention.”
©2023 Bloomberg L.P.