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Council tenants on Universal Credit 16 times more likely to abandon tenancies
Council tenants on Universal Credit are 16 times more likely to abandon their tenancies and three times more likely to be evicted than those receiving housing benefit, a new report has indicated.
A survey of local authority landlords by the Association of Retained Council Housing (ARCH) and the National Federation of ALMOs (NFA) also revealed that the new welfare system is costing councils hundreds of thousands of pounds in extra housing management spending.
It showed that two-thirds (67%) of council tenants receiving Universal Credit are currently in rent arrears, owing an average of £564 – equivalent to seven weeks’ rent.
In comparison, 21% of households on housing benefit are in arrears, owing £221.
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The proportion of Universal Credit tenants behind on the rent has fallen from 72% a year ago, while the percentage of tenants using the new welfare system has risen from 4% to 12%.
However, more than one in five (222 per 1,000) such households have received a notice seeking possession from their council in the past year, compared with just 47 in 1,000 housing benefit households.
And evictions for Universal Credit tenants stood at 2.7 per 1,000 – three times more than the 0.9 per 1,000 for those on housing benefit.
Tenancy abandonment levels were 1.6 per 1,000 Universal Credit households, compared with just 0.1 for housing benefit households.
Only 27% of Universal Credit tenants are on alternative payment arrangements (APAs), where their housing costs are paid directly to the council, down from 29% in last year’s survey.
ARCH and the NFA are calling on the government to scrap the five-week delay before new Universal Credit claimants receive their first payment, improve the APA system and fund ongoing support for people relying on the system.
The bodies warned that although the arrears situation “appears to be stable and in some cases improving”, this has come “at a considerable cost to landlords”.
“We cannot stress enough how much time it takes and how much it costs NFA and ARCH members to cope with the impact of Universal Credit,” said Chloe Fletcher, policy director at the NFA.
“Councils and their management companies have had to innovate and come up with countless work-arounds to make sure arrears don’t escalate and tenants are able to keep their homes when they move onto the new benefit system.
“This level of intense support from social landlords just isn’t sustainable as Universal Credit rolls out and the government starts to move existing benefit claimants onto Universal Credit.”
A total of 39 councils and ALMOs managing more than 500,000 homes responded to the survey.
