NHF survey finds that 60 per cent of tenants on universal credit had rent arrears, as compared to 36 per cent of other tenants, and that average rent arrears for universal credit claimants were double the average of those paying by other means
New research from the National Housing Federations (NHF) has found that housing association tenants on universal credit are more likely to be in rent arrears and to have higher average arrears than other housing association tenants.
In a new report, Universal Credit in a time of crisis, the NHF sets out findings of research into rent collection for housing associations during the Covid-19 pandemic, with a particular focus on any differences for tenants on universal credit in light of the fact that, since the start of the pandemic, the number of social rented households in England claiming the housing element of universal credit has increased by 39 per cent, representing more than a quarter of all social renters.
Key findings from the NHF’s tracking survey of 23 housing associations in England before and during the pandemic include that -
- 60 per cent of tenancies paying their rent with universal credit were in arrears compared to 36 per cent of those paying by other means (either self-payers or on legacy benefits) from April to September 2020;
- average rent arrears for households claiming universal credit in arrears were double the average for those paying by other means - £609.92 compared to £301.29 - from April to September 2020;
- overall, total arrears for universal credit claimants were consistently higher than those paying by other means, despite making up just over a quarter of occupied tenancies; and
- on average, households claiming universal credit in arrears owed more than six weeks of rent, based on 2019/2020 average general needs social rent for England (the lowest cost rent for social housing).
The NHF also finds that, if this pattern continues, rent arrears could potentially rise by an additional £330 million, and average debt per household could nearly quadruple (from £113 to £420), when all working-age housing benefit claimants move to universal credit.
Highlighting that the relationship between universal credit and rent arrears is complicated, the NHF goes on to recommend that -
- the DWP should publish in full its existing research with housing associations on households claiming universal credit and rent arrears;
- the DWP should produce better national statistics (and local information) on housing association tenants claiming help with housing costs through universal credit;
- the DWP should continue to work with housing associations to understand drivers for rent arrears, provide better advice to those claiming housing entitlements, and improve the claimant experience., including more strategic involvement with social landlords on the co-design and improvement of universal credit systems;
- the £20 per week universal credit uplift should be made permanent to prevent rent debt and ensure people can cover their essential expenses, and there should be an urgent review of the five-week wait and deductions system to ensure that people can cover their basic needs while meeting any obligations to creditors in a fair and sustainable way; and
- the DWP and the Ministry for Housing and Local Government should conduct further research to understand drivers for arrears and act on findings to ensure no household on universal credit suffers increasing rent arrears or other debt.
The NHF report Universal credit in a time of crisis is available from housing.org.uk