Falling behind

This report from UK think tank The Smith Institute looks at the impact of Universal Credit on rent arrears for council tenants in London.

The study of rent accounts in 12 London boroughs (who collectively own over 210,000 homes – or 13% of England’s total council housing stock) showed that the roll-out of Universal Credit is leading to a growing number of council tenants falling behind on rent payments. The report – commissioned by Southwark Council on behalf of the cross-party group London Councils – warns that the five-week wait between making a successful Universal Credit claim and receiving the first payment is contributing to a spike in rent arrears. Headline findings: tenants’ rental balance worsens for the majority after they claim UC.• Rent arrears are high in the initial weeks as tenants move on to UC and are not repaid. • On average tenants build-up £240 of rental arrears after they make a UC claim. • In the initial week the majority of accounts are in arrears – suggesting payment issues are not confined to a minority but are widespread. • However, a minority of larger underpayers contribute significantly to the total level of arrears. • Alternative Payment Arrangements (APAs) are shown to slow the growth of such large arrears and their early use does so faster.

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