21 Dec 2018
If you rent your home, then you are more than twice as likely to have to borrow money than a property owner.
A growing financial discrepancy between home owners and renters has been identified by YouGov.
The market research and data analytics firm examines the situation in the latest edition of its debt tracker.
YouGov's study indicates that 15.5% of adults in the UK are overly-indebted. Those who are over-indebted have a heavy financial burden and, as a result, can be three months behind in commitments. Up to a quarter of their credit is said to be insecure, and their total credit levels are up to 50% or more of their household income.
Housing availability and prices are reported to be becoming key contributors to indebtedness in the UK.
YouGov says the average annual income of a home owner is £43,410, compared to renters who are on £25,678.
Those who rent their property are more than twice as likely (13%) to have to borrow money as home owners (6%).
Of those that are over-indebted 49% are currently renting, 25% have a mortgage and 8% are living rent-free in the likes of a friend or relative’s property.
YouGov’s study indicates that 8% of those who are financially distressed turn to payday loans.
However, the UK's best-known payday lender Wonga collapsed earlier this year. YouGov adds: "There is the issue therefore of where those people will turn to now that Wonga has disappeared.
"It is debatable whether another company will appear due to increased regulation. One option that we may see is less formal forms of credit filling the gap – whether that is loans from friends and family, or unsecured loans.
"Our debt tracker reveals that one in 10 in the UK are likely to borrow money in the next six to 12 months. However, just 7% who are considered financially distressed, and only 4% who are struggling to keep up with bills or credit commitments, will seek independent financial advice relating to debt.
"With an uncertain future ahead, this is one area in which more can be done in terms of marketing these services to the public."