According to the homeless charity Shelter, there are 3.8 million families in the UK that are just one pay cheque away from the start of a slippery slope to homelessness.

According to a survey of working adults who pay either rent of a mortgage these 3.8 million families could only last a month with no income, but more worryingly says Shelter a third of these could not pay next month’s rent is they lost their income today.

Government figures that show that 15 million working age people have no savings to fall back on back this up says Shelter.

Liz Clare, a Shelter helpline advisor, said:

This research highlights how millions of us now find ourselves living on a financial knife-edge – month to month, paycheque to paycheque’. And Campbell Robb, Shelter’s chief executive, said: ‘No matter how hard ordinary families work, in today’s ‘knife-edge nation’ a drop in income can all too quickly put their home at serious risk,’ and added that ‘The government must make sure the safety net is strong enough to stop families falling through the gaps, and going through the nightmare of losing their homes’.

But one has to wonder how high the safety net has to be as it:

• only takes one missed mortgage payment to blacken a credit record and starting the fees racking up

• only takes two missed rental payments to start the repossession ball rolling.

There is also no requirement on local authorities to rehouse people until they have been kicked out of their homes (mortgaged or rented) by the courts. Should we be looking for them to step in before the final point, especially where children are involved?

Terraced Houses-2 (PD)It also has to be realised that most people would probably have dipped well into their credit allowances (card or loans) to find the money for their rent or mortgage before the first missed payment. So their financial position will not look particularly pretty. That means they will be unlikely to be in a position to be ready to move quickly, if at all.

What Shelter does not mention though is that if this many people are so close to the edge now, what will happen when interest rates inevitably go up? Do those with mortgages have the slack in their income to pick up the added burden? And do those who rent have the slack in their incomes to pick up their landlords’ extra mortgage payments?

Of course there are insurance products available, but how many people can afford to keep up any meaningful level of protection when rents and mortgages are such a large proportion of income? Especially in places like London and the South east.

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