As interest rates and rent prices rise, one woman can’t keep up with her payments and fears eviction from her flat in London.
Sadie James has as struggled for years to stay on top of her finances. And as the cost-of-living crisis continues to bite, she can’t keep up with the rise in rent, food and energy bills. Her welfare payments aren’t making much difference either.
The 61-year-old explained she has “a meltdown each time I think about it.”
The rise in bills has weighed on her emotions as she feels “angry” and “totally overwhelmed”.
The Bank of England has increased interest rates 13 consecutive times in the past year in a bid to bring down high inflation.
Currently, the base rate sits at five percent which has negatively impacted the housing market.
The average two-year fix is above six percent, and the private rental payments paid by tenants increased by 5.1 percent in the 12 months to June, according to ONS.
However, a bigger-than-expected fall in UK inflation has meant financial markets are no longer expecting interest rates to increase as sharply, helping the housing market.
Ms James told APnews: “I’m literally depressed, I’m angry, I’m totally overwhelmed about it because I don’t want to lose my home.”
The base rate hikes have led to the biggest fall in household wealth in Britain since World War 2, according to new research from the Resolution Foundation think tank.
Though inflation has eased from a double-digit peak last year to 7.9 percent, the central bank is expected to keep hiking the base rates to get inflation to its two percent target by December.
Many landlords facing higher mortgage payments want to pass on those costs to renters.
Rents have jumped for the 14th consecutive month, by a record 5.1 percent, adding to concerns that the private rental market is struggling to meet a rising level of demand from people unable to buy a home.
Ms James said her landlord, in London, has raised her rent yearly and most recently declared a four percent bump to £170 ($223) a week.
For Ms James, who is barely managing to cover her other bills, the rent increases seem relentless and she is terrified of being evicted.
She said: “It’s a nightmare, thinking they’re going to come one day … lock my door and I can’t get in.”
Despite the sharp increase in mortgage rates, renters have struggled to afford their housing to a greater degree than homeowners, according to Britain’s statistics agency.
Renters typically spend a higher proportion of their income on housing costs, it said.
Jon Taylor, a debt manager at the charity Christians Against Poverty said: “Already, the rent increases are astronomical here in London, and people can’t afford that.
“There’s this group of people that would have just about been able to pay their rent, but it’s just not sustainable anymore. And so something’s got to give.”
