Tuesday, 17 February, 2009
SOUTH Africans leasing property are feeling the pinch of the credit crunch as overspending puts strain on their ability to pay rent.
According to the latest report by the Tenant Profiling Network the credit bureau released yesterday, 12 percent of tenants are unable to make their payments, while 46 percent made late or partial payments.
The report showed a rapid slide in rental payments last year. During the first quarter, 70 percent of tenants paid the rent diligently, but by the end of the year only 54 percent could pay on time.
Michelle Dickens, managing director of TPN, said this was due to most people over-extending themselves financially or renting a property beyond their means.
She said: “To manage their debt, many renters fall into the trap of applying for personal loans to pay off debt.
“Using credit to pay off credit only worsens the situation, pushing the consumer closer and closer to financial ruin,” Dickens said.
“Last year, the rental market was oversupplied, but this year people have slowly gone back into the market, either by pooling their resources or downgrading.”
KwaZulu-Natal tenants struggle the most with non-payment of rent, with 18 percent of all tenants not paying. It was followed by the Eastern Cape and Gauteng with 10 percent non-payment and Western Cape with 8 percent.
Segments battling the most were those who had to pay R12000 or more in rent. People in the R3000 to R7000 a month segment paid their rent promptly.
Source: http://www.thetimes.co.za/