MSE News: Tenants forced to use payday loans to beat rent hikes
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What if your mortgage increased though and you were struggling?
When this comes in (October this year possibly), local housing allowance (LHA) will be paid monthly and, most likely, direct to the tenant. Previously, there were many instances when it was paid directly to the landlord. This monthly payment will be made in arrears, around 7 days after the month end. Bearing in mind that rent is usually paid in advance, this is going to cause cash-flow problems to the tenants.
I believe that many housing associations are budgeting for an increase in rent arrears.
This will always happen. I know of people not paying their mortgage and getting into more debt to have the latest model of car etc. Both examples will lead to loss of home but I'm sure the blame will be aimed at government, banks etc, never themselves.