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Universal Credit leaves thousands in Rent Arrears – What can be done?

Rent Arrears are disruptive and damaging for everyone involved. For tenants who find themselves facing mounting rent arrears, concerns over debt and possible eviction are paramount; whereas housing associations and landlords, bound by legal guidelines and protocols, face a backlog of unpaid rent and financial insecurity. In the last few years particularly, this has become an increasingly prominent issue.

As Universal Credit is rolled out across the country, housing associations find themselves increasingly up against a brick wall when attempting to obtain unpaid rent from their tenants. The welfare reform has resulted in a sharp increase, with more than 70% of council tenants on Universal Credit in London finding themselves in rent arrears, The Observer’s study on 105 councils reporting that half of all UK council tenants on Universal Credit are at least a month behind on their rent.

The impact on social housing is significant. With rent arrears stacking up from tenants, housing associations will likewise find themselves unprepared to deal with the changing situation. There are strict guidelines in place for social landlords when pursuing rent arrears, with a rigid pre-action protocol that must be followed. They will be under increasing pressure to support tenants and prevent accumulation of rent arrears. On top of that they have a responsibility to maintain and sustain tenancies, so eviction should always be viewed as the last resort.

Now hear from the expert: Eamon McGoldrick, Managing Director at the National Federation of ALMOs, who will share some insight into the issues surrounding rent arrears:

How has the roll out of Universal Credit affected rent arrears?

It causes an initial increase in rent arrears largely due to the waiting period for claimants to receive their Universal Credit payment. Arrears tend to then level out as tenants make agreements or use APA’s to clear debts

What are the main challenges facing Income Collection Managers?

How to collect rent without a dramatic increase in costs and at the same time protect vulnerable tenants from getting into serious debt and facing eviction

What are your top tips for managing rent arrears?

You must have a person centred approach to collection and there is a lot to be learned from others facing the same challenges. Learn and share!

So how can housing associations tackle rent arrears?

How can housing associations respond effectively to this problem? Our Effectively Reducing Rent Arrears course on the 24th April sets out the ways in which housing associations can create an effective plan to tackle their tenant’s mounting rent arrears. Using techniques like effective data usage and customer insight to identify those at risk of financial vulnerability, alongside pre tenancy work and affordability checks, housing associations can ensure that they are well equipped to identify and support tenants at risk of rent arrears. Delegates on this course will learn from award winning housing associations and housing expert Eamon McGoldrick about how to create a rent payment culture in their organisation, establishing rent as an automatic priority. It is also an opportunity to gain insight into the procedures and protocols behind rent enforcement, with legal experts on hand to discuss how to navigate legal pathways to rent enforcement. Delegates will receive expert advice on how to develop new and efficient ways of tackling rent arrears.

The best way to tackle this is in your organisation is to ensure that you are fully trained in identifying, preventing and responding to rent arrears.

Get involved in the conversation!

What issues has your organisation faced regarding rent arrears? What advice can you give other organisations who are facing these issues currently?

We’d love to hear from you. You can tweet us using #UMGTraining @UModernGov.

If you would like to discuss any of the details you have read in this blog; including our Effectively Reducing Rent Arrears’ course on Tuesday 24th April, please contact us on 0800 542 9440 or email [email protected].

Can’t make the date?

We can also run this course for you In-house, at your organisation or a venue of your choice, on a date to suit you.

Contact our In-house training team on [email protected] or call 0800 542 9414 to find out more.