Dino Kyprianou, ICT applications manager at PA Housing, discusses how technology is helping its income officers support tenants and reduce the risk of rental debt.
According to a recent report, the number of people falling into arrears could triple during the next 12 months as a result of the fallout from coronavirus.
The suspension of evictions at the height of the pandemic helped to ease the pressure on tenants struggling to balance their finances in the short term. But as the economic and social impact of the crisis continues to bite, it’s becoming increasingly important for housing providers to put longer term strategies in place to flag issues early and prevent families falling into a downward spiral of rent arrears. This is something we’ve been focusing on at PA Housing.
Time for change
Imagine a family of four who, up until lockdown, had always paid their rent on time. An unexpected bereavement could put the household finances under huge strain and the tenants could quickly find themselves falling into rental arrears.
Trying to predict which households are most likely to fall into debt isn’t easy for any housing provider because you just don’t know when people’s circumstances might change.
However, we’ve recently made some alterations within our housing management system, Northgate’s NPS Housing, to help us spot the early indicators so we can gain a much clearer understanding of the impact the pandemic is having on our tenants.
The changes we’ve made have enabled us to better analyse the payment information we have access to, so we’re alerted much earlier if payments start to slide, giving us the time to work with tenants to get clarity on what help they need.
So, if the rental payments of a couple who have always settled their bill on the first Monday of the month suddenly begin to come in two weeks later, the income officer can flag this. They can then take steps to identify potential reasons for the change. For example, it might be because someone in the household has recently had to cut their working hours to look after a vulnerable family member who is shielding. In this situation, a little extra breathing space on the rental payment date could make all the difference.
We can now delve deeper into our rental accounts and differentiate between a short-term late payment issue and a more serious situation where there’s a significant risk of long-term rental arrears. This means we can take cases that require no further action off the priority list and focus on helping those who need more support.
The ability to analyse payment details opens the door for housing providers to take more nuanced and tailored measures to support tenants in getting through the often-temporary difficulties they experience.
The enhancements we have made to our housing management system allow our staff to rank properties in terms of the risk of rental arrears and monitor their movements up and down this list over time.
It means that we can see if a tenant moves from the top 50 to the top 10 for arrears and review the situation on a weekly basis to identify those households we need to work with more closely to understand what help they need.
We can spot patterns and trends in rental payments too, such as a tenant who falls into arrears after applying for universal credit. In a case like this, we would expect to see the debt reduce as universal credit payments catch up; if this doesn’t happen, it’s an indicator that the household might be in financial difficulties or facing extra challenges, again enabling us to offer the right support at the right time.
Sometimes, all that’s needed is some budgeting advice or we’ll create a repayment plan to help a tenant manage their arrears. We can then track the success of the intervention through the system and adjust a plan if necessary.
However, we also have a hardship fund which can be allocated to specific tenants to help prevent them from sliding into more significant debt, with no requirement for the funds to be paid back. For example, we might identify that a family’s rental payments always dip over Christmas, or perhaps a tenant tends to fall into arrears over the summer because they have the extra cost of buying school uniforms or equipment for children in the run up to the start of the new academic year.
With a more complete picture of the financial pinch points for individual tenants, we can be more proactive in supporting vulnerable residents and provide some extra help in challenging times from the hardship fund.
A fresh approach
Now more than ever, housing providers need to have the right tools and information to be able to identify tenants who are getting into financial difficulties before they reach the point where they are accumulating unmanageable levels of debt.
With more insight into tenants’ changing circumstances, informed decisions can be made to better support families as they navigate their way through the current crisis and in the years to come.
Dino Kyprianou is the ICT applications manager at PA Housing.