Latest Universal Credit Survey reveals rent arrears exceed £6.68 million

Latest Universal Credit Survey reveals rent arrears exceed £6.68 million

A report measuring the impact of Welfare Reform on tenants and landlords in England, reveals the undue stress and hardship individuals are experiencing claiming Universal Credit – where nearly a third of all households living in council and ALMO owned homes were in rent arrears as at the 31st March 2017.

Undertaken in May 2017, The National Federation of ALMO’s (NFA) and the Association of Retained Council Housing (ARCH) have called on the government to stop or slow down its planned rollout of of UC until such time as the following issues highlighted are resolved satisfactorily in order to prevent further distress and financial hardship to many families, as well as unprecedented levels of rent arrears and demand for support from landlords.

NFA and ARCH key asks:

  • End the 7 day waiting period for new claims.
  • Slow down the speed of UC rollout until the procedural issues with the existing system have been resolved.
  • Create a transitional funding pot for landlords to enable them to effectively manage the rollout of UC and adequately support vulnerable tenants.
  • Improve the digital engagement for full service (especially for older tenants).
  • Improve the process of UC for claimants and landlords, including integrating the learning from the Live Service.

The ‘Pause For Thought’ Welfare Reform Report (2017) Key Rental Headlines are:

  • The total arrears deficit across 42 respondents was £68.5 million. The average level of arrears per household was £414.40.
  • Approximately 2.6% of households living in council and ALMO owned homes have moved onto Universal Credit (UC).
  • Of these nearly three quarters were in arrears (73%). The total arrears deficit for UC claimants across 37 respondents was £6.68 million, or approximately 10% of the total arrears bill.
  • 40% of UC claimants in arrears were not in arrears prior to going on to UC.
  • On average, UC households in arrears owed £772.21.
  • The data for the cohort group shows that there has been an 11% rise in average arrears for UC households in arrears, rising from £668.68 in March 2016 to £744.12 in March 2017.
  • 56% of UC households in arrears had arrears totalling more than 1 month (average arrears of £890.31).

Comments on Universal Credit from the report echo what we’re hearing from our landlord and agent members;

“We have noted the emotional impact Universal Credit (UC) can have. UC can be triggered by a change of circumstances which may often be a relationship breakdown or illness. So tenants are dealing with the stress of this anyway and then have the added burden of UC to deal with.” – Survey respondent.

“One tenant supported by the Tenancy Support Officer and Financial Inclusion Officer, had a series of problems claiming UC. His original online application was submitted with officer assistance, the DWP claimed to have lost it, a waiting period was applied which shouldn’t have been and his payments were frequently stopped as they attempted to correct his claim. Eventually he was starving, stressed about having no cash and so fearful of what was happening that he was sectioned. He was held in a secure unit, and during that time his claim was sorted out. Since then he’s had few problems as his payments are regular.” – Survey respondent.

Are you worried about your tenants falling into rent arrears because of Universal Credit?

This report primarily highlights significant concerns that as UC rolls out fully, landlords will not have sufficient resources to devote to supporting households affected – where it is anticipated that the impact on the numbers of tenants falling into arrears, and the overall levels of arrears will rise significantly.

Which is why thorough tenant referencing coupled with rent guarantee demand is soaring, what with county court judgements increasing by a whopping 35%. (click for full story)

EXCLUSIVE Rent Guarantee Insurance package for Tenants in receipt of Housing Benefit or Universal Credit – Click for full information.

Furthermore, The National Landlords Code of Excellence (NLCE UK) are currently planning a course on Universal Credit in the South West area.

Got something to say? Please click here to get involved in the live discussion now!

Related topics:

Welfare Reform via Universal Credit | New helpline for landlords launches

The importance of referencing Universal Credit tenants

Author: News @ Tenant Referencing

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