A survey from Allpay has found that affordability checks, door-to-door collection and increasing the number of residents paying rent with a direct debit are just some of the ideas being considered by housing providers to minimise arrears once universal credit is introduced.
Based on the views of over 100 housing professionals, Allpay reported that more than 60 per cent believe their organisations will be carrying out affordability checks on new residents by the time the reform is rolled out in 2017, with nearly a quarter believing door-to-door payments will be part of their collection strategy.
In terms of the underlying ethos behind the welfare reforms and the introduction of universal credit, only 10 per cent of respondents expected the reforms to get more people into work. Furthermore, almost a third of the respondents thought that universal credit will not be the default method by 2017.
Almost 90 per cent of the respondents thought that arrears would increase by 2017, with no respondents expecting arrears to decrease. In the six areas where direct payments to tenants are being trialled at the moment, eight per cent of the rent due remained uncollected on average after four months, with the housing providers warning of creeping arrears and increased resources being allocated to income collection.
The respondents expected that 40 per cent of tenants will be paying their rent via a monthly direct debit by 2017, over double the 17 per cent using it at the moment, as reported in the DWP’s survey of tenants involved in the direct payment demonstration projects.
The Allpay survey shows that there will still be a big demand for cash payments with respondents believing that nearly 20 per cent of their residents will still be paying this way in 2017, with 15 per cent using a debit or credit card and 10 per cent using a standing order.
Nick Peplow, business development director, Allpay, said, “The survey results emphasise the importance for housing providers to offer tenants a wide range of payment options, and that with the increased support and advice being offered to them by landlords, local authorities, charities and other organisations, more tenants will be comfortable using automated payment channels such as direct debit.”