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1 million a year rely on payday loans to pay mortgage

Almost one million people have taken out a payday loan to help pay their rent or mortgage in the last 12 months, according to research by Shelter.

A YouGov survey for the housing and homelessness charity also reveals that 15% of respondents – equating to almost seven million people – are relying on some form of credit to meet their housing costs, such as payday loans, unauthorised overdrafts, other loans and credit cards.

Shelter is warning that the new year could bring a risk of homelessness for those already struggling to pay their rent or mortgage.

Campbell Robb, chief executive of Shelter, says: “These shocking findings show the extent to which millions of households across the country are desperately struggling to keep their home.

“Turning to short-term payday loans to help pay for the cost of housing is totally unsustainable. It can quickly lead to debts snowballing out of control and can lead to eviction or repossession and ultimately homelessness.”

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  • Andy Valvona 4th January 2012 at 4:18 pm

    Actually, 92.73% of all statistics are made up…… including this one!!!!

  • Subprime kabooooooooooooom 4th January 2012 at 3:26 pm

    NHU is right…….its like when they ask 100 students if they’ve got the clap and when 1 say they have they factor that up by the number of students in the UK.

    Ergo you end up with some ridiculous statistic like ‘based on a recent survey over 500,000 students have the clap’.

    Statistics…….58% of them are wrong 😀

  • No Hair Mortgage Underwriter 4th January 2012 at 1:55 pm

    Tony Arnold – I think you miss my point, the survey would have only been conducted amongst a couple of hundred people, which is unlikely to be indicative for the whole nation, so to then extrapolate the 15% across the nation’s renters and borrowers will given a false reading. Given that there are 15m mortgage accounts in the UK, if 15% are reliant on payday loans etc. do you think the CML would only be predicting 45,000 repossessions this year? Also how many of those people taking these loans are doing so to alleviate a short term issue for their finances – particularly given the time of year!! With regards to advice the majority of these people would have received some kind of advice at the time they applied for their mortgage but unfortunately we cannot always mitigate for life’s events.

  • Tony Arnold 4th January 2012 at 12:57 pm

    1 million people is not extrapolative. This is very serious, potentially avoidable had these individuals been given sound financial advice prior to taking out their mortgages.

  • Andy Valvona 4th January 2012 at 12:44 pm

    It’s all very well for Shelter to say that turning to short term loans in order to pay for housing costs is unsustainable. What I’d like to hear from them, however, is some constuctive comments as to what they think people should do about it. As baldy has just said, they made similar comments last year.

  • No Hair Mortgage Underwriter 4th January 2012 at 12:17 pm

    Same old story from SHELTER at this time of year – you may remember last year it was about how many people are making their mortgage payments by credit card – the thing is they conduct a very small survey and then extrapolate these findings across the whole of the nation to create sensationalist hype!

  • Bald Headed Underwriter 4th January 2012 at 12:12 pm

    Same old story from SHELTER at this time of year – you may remember last year it was about how many people are making their mortgage payments by credit card – the thing is they conduct a very small survey and then extrapolate these findings across the whole of the nation to create sensationalist hype!

  • Seb Powell 4th January 2012 at 11:22 am

    Perhaps Shelter should come up with a counter service that allows people to borrow when in need for say £2