New research by three housing bodies representing over 1.3m council households shows rising numbers of tenants in arrears and a significant rise in the level of rent owed since the introduction of the bedroom tax. The findings are the result of a joint project from the National Federation of ALMOs, the Association of Retained Council Housing and the Councils with ALMOs Group into the impact of welfare reforms on council tenants.
During March to June 2013, the number of council households in arrears rose by 21 per cent, with the total monetary value of arrears rising by 16 per cent. Based on the trends identified by the survey, this suggests that local authority rent arrears rose nationally by £17.5 million in the first three months after the implementation of the government’s welfare reform. For households affected by the spare room subsidy, there was a 59 per cent increase in households deemed to be under-occupying going into arrears.
Chloe Fletcher, policy director, NFA, said, “Given the rising cost of living, local authority spending cuts, and changes to the wider welfare benefits system, it isn’t surprising that councils and ALMOs are finding it more difficult to collect rent. What is alarming is the speed by which households affected by the under-occupancy penalty have struggled to maintain rent payments and the scale of unintended consequences of the reforms for housing providers in some parts of the county.”
The research also found that 24 per cent of landlords reported a rise in empty properties with the associated costs of dealing with these, and 42 per cent reported a drop in demand for some types of properties as households struggled to afford larger homes in some parts of the country.
Matthew Warburton, policy advisor, ARCH, said, “The survey confirms that most councils will not have enough smaller accommodation available in the coming year to enable more than a small proportion of affected tenants to downsize. This implies that arrears are likely to go on rising as tenants continue to struggle to pay.”