Increase in rent arrears after introduction of bedroom tax

A major survey of social ­landlords has found that rent arrears have risen in some of Scotland's poorest communities since the introduction of the so-called bedroom tax. 

New figures show that the amount owed to residential social landlords (RSLs) such as housing associations soared by nearly £800,000 after the welfare reform was introduced in April this year. 

The survey of local authorities and RSLs found that while many were already reporting an increase in housing debt, this has accelerated since the UK Government's Spare Room Subsidy came into force.

Those affected by the measure lose housing benefit if they are judged to be occupying homes which are larger than they need.

The survey, carried out by the Scottish Housing Regulator (SHR), covered 187 local authority landlords and RSLs, of which 84% responded.

Asked about the period from March 2013 until June 2013, nearly two-thirds of landlords (64%) told researchers they had seen an increase in arrears in the quarter since the introduction of the bedroom tax.

The SHR said the new research gave the fullest available picture of the early effects of the bedroom tax on rent arrears.

Iain Muirhead, the Regulator's Director of Strategy and Communications, said the data gathered from landlords would provide a baseline and the research would be repeated on a quarterly basis to build up a picture of the impact of housing benefit reform.

However, he warned that the clear message from landlords was that the Spare Room Subsidy was making it harder for tenants to pay their rent and making it harder for RSLs to manage their finances.

He said: "Our role is to protect tenants' interests. Understanding the risks and challenges landlords face is crucial to our work.

"This research shows an ­emerging and complex picture. We want to get more information and see a fuller picture before we would draw any firm conclusions on what is happening and why."

The regulator's report on the findings estimates that rent arrears increased by approximately £789,000 during the period among social landlords who had provided full data.

The report says 58,900 tenants have been affected - around one in eight - with approximately 50,000 losing 14% of their housing benefit after being deemed to have an extra room, while nearly 10,000 lost 25% of housing benefit due to having two or more rooms which were deemed surplus to their requirements.

Two-thirds of social landlords estimated that up to 5% of their arrears at the end of June 2013 were attributable to the removal of the Spare Room Subsidy. A further one-fifth of landlords estimated that the removal accounted for around 10% of their arrears.

Local councils were more likely than other social landlords to report that the change was having a larger impact on rent arrears.

The SHR has advised councils on ways to lessen the impact of the bedroom tax, including employing additional workers and providing advice to tenants. The report found most are already taking these actions to cope with welfare reform.

Social landlords said the biggest challenges they faced were dealing with an increased workload and falling income as a result of the cuts, while 60% of councils said a shortage of alternative housing stock was their biggest problem.

The findings are broadly in line with those produced by a survey carried out by councils in June, although the Cosla survey claimed a total of 82,500 households had been affected by the bedroom tax.

Last week Deputy First Minister Nicola Sturgeon said another £20m would be spent next year to mitigate the impact of the benefit cut.