San Francisco, CA- According to new numbers released by housing charity Shelter, nearly 66% of the population is struggling to pay rent or respective mortgages, with nearly 1 million turning to payday loans in order to pay housing costs.
Of those who struggle, 4% are potentially at risk of not being able to keep their residence due to falling behind in payments. That accounts for 1.4 million families in total. Figures state that 20% believe they are in a ‘constant struggle’ to pay rent or their mortgage. That number represents a 44% increase since the Shelter’s numbers for 2011 were released.
The charity has stated that its research indicated that nearly 1 million people had used a short-term loan in order in fiscal 2012 in order to pay the rent or mortgage. An additional 2.8 million stated that they had used unauthorized overdrafting, and another 10% did so each month.
Within the last year Shelter found a similar number of people using payday loans to meet rent payments.
StepChange, a debt counseling charity, recently warned against the growing danger of reliance on short term (often known as payday loans) as they commonly bring with them an interest rate of 4,000%. It stated that the number of those seeking such loans had increased by nearly 300% since 2010, which was a troubling sign.
“It’s shocking to think that so many families will be starting the new year with a huge weight hanging over them, trapped in a daily struggle to keep their home,” said Shelter’s chief executive, Campbell Robb.
“Payday loans may seem like a quick fix, but the huge interest charges mean things can quickly spiral out of control. It is vital that anyone who is having difficulty paying their rent or mortgage gets advice now.”
Findings by Templeton LPA expressed that while the number of tenants evicted in 2012 increased only marginally, the number of serious arrears what essentially static. Yet, nearly 86,000 individuals were in severe arrears, which is defined as being two months or more behind on rent.
“Tenants’ finances have suffered a gruelling combination of rising living costs and rental inflation throughout much of 2012,” said Paul Jardine, director and receiver at Templeton LPA.
“With many budgets balanced on a knife edge, a slight reprieve from rapid rent rises towards the end of the year has been very significant. But the recent strength of the labor market has played the biggest role in halting the upwards climb in the number of tenants in severe financial difficulty.”
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