Millions to struggle with rents under welfare reforms

A million people living in social housing could struggle with their rent and end up in debt as a result of the Government’s welfare shakeup, the National Housing Federation (NHF) has warned.

A NHF-commissioned report by Ipsos MORI and the University of Cambridge found that most housing associations fear a significant rise in rent arrears and believe their residents have little or no idea how the welfare changes - which are being rolled-out later this year – will affect them.

An Ipsos MORI survey of housing associations - which between them provide homes for over two million people - found eight out of ten (84%) thought rent arrears would jump by an average of 51%.

If reflected across the sector, this is an equivalent rise of £245m in rent arrears. Fifteen percent of housing associations think their rent arrears could double.

Housing associations claim the introduction of direct payment of benefit to tenants, the bedroom tax and the household benefit cap will have a substantial impact on the lives of residents and on their organisations. But more than half of associations (57%) worry that their tenants know hardly anything or nothing at all about the benefit changes.

Previous research by Policis for the NHF found almost a third of working age social tenants in Britain (one million people) will need extra support to help manage their budgets when, under Universal Credit, their housing benefit is no longer paid directly to landlords.

The NHF's chief executive, David Orr, said: "Within a few short months, hundreds of thousands of low-income families will see their housing benefit cut as a result of the Welfare Reform Act. Many could fall behind on their rents, putting at risk the roof over their heads.

"Housing associations are doing their best in tough circumstances to cushion the blow for their residents. But there is still a lot of uncertainty, including in Government, as to the full impact of its reforms. We need more time to understand and prepare for the impact of these massive changes to the welfare system.

"In these difficult times, the best way to help residents manage their finances is to allow them to continue having their support for housing costs paid direct to their landlord. Otherwise we are in danger of seeing rises in homelessness and families really struggling to make ends meet."