Laura Sharman 16 January 2017

Universal Credit has 'devastating impact' on rent arrears says research

Universal Credit has devastating impact on rent arrears says research image

The amount owed in rent arrears for people claiming Universal Credit (UC) and living in council housing has nearly doubled in the past year, new research has revealed.

A new study by the National Federation of ALMOs (NFA) and the Association for Retained Council Housing (ARCH) found 89% of claimants were in rent arrears last September, compared to 79% in March 2016. The average value of the debt has almost doubled to £615 from £321 over the same period.

John Bibby, chief executive of ARCH, said he was 'extremely concerned' about the increase in rent arrears for UC tenants. 'Not only are numbers of households increasing as UC is rolled out, but the percentage of households falling into rent arrears and experiencing financial difficulty is critically high,' he said.

'If this trend is not reversed it will have significant impact on local authorities’ rental income streams and the long term ability for housing departments to provide essential services to their communities.'

Both NFA and ARCH are calling for an end to the seven day waiting period for UC claims.

Hugh Broadbent, NFA chair, said: 'We believe the current unacceptable waiting times and errors in processing claims are causing significant financial hardship to our tenants and communities.

'The reported increase in the presence of loan sharks within our communities is alarming, but sadly not surprising. The delay in claimants receiving benefit inevitably forces households to turn to other ways to survive, including family and friends, pay day lenders and as a last resort loan sharks. The repayment of extortionate interest only further exacerbates a tenant’s ability to pay their rent.'

The Brownfield Land Release Fund image

The Brownfield Land Release Fund

To what extent does this early initiative of the Department for Levelling Up, Housing and Communities deliver on the ‘levelling up’ agenda? Lawrence Turner reports.
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