UK Bill Help

New figures from the Homes and Communities Agency (HCA) reveal that arrears resulting in evictions increased 20% in England over the past year. The marked increased confirmed what many frontline money advisers already knew–that tenants were struggling to match rent increases with increased earnings.

The figures are based on tenants who rent through large housing associations. Eviction notices were even larger, with a 22% increase.

Those who have fallen behind on rent are part of a larger trend towards greater financial hardship amongst those who earn lower household incomes. There are two very specific reasons behind the eviction increases.

1. Rents are increasing faster than incomes. Even though housing associations feature cheaper rents than surrounding private landlords charge, increases in those rental rates can still be difficult for a household struggling to get by. The HCA report revealed that average rental rates increased by 4.4% over the past year. Average wages barely increased over the same time period. With higher rents combined with higher utility costs, tenants just cannot keep up with the increases and are therefore falling behind on rent with increased frequency.
2. The bedroom tax is contributing to arrears amongst tenants who choose not to downsize or encounter resistance to their desire to downsize. Some neighbourhoods simply have more tenants seeking to downsize than available rental properties to accommodate those requests. This situation is confirmed by a separate report by the Department of Work and Pensions (DWP). The DWP’s Interim Report that was released on 15 July revealed that only 41% of tenants paid the bedroom tax in full during the first five months of the tax. Nearly as many (39%) had paid some of the tax owed but 20% paid zero towards the tax owed. Some tenants choose to pay their rent over the tax, while many are falling behind on both. While Discretionary Housing Payments (DHP) have been successful at offsetting the bedroom tax for some tenants, it is criticised for being a temporary measure that does nothing to promote permanently affordable housing. Many tenants who are unable to pay both rent and bedroom tax are unaware that DHP grants are even available.

DHP is one of many grants that are available to tenants across England and the rest of the UK. An alarming share of evicted tenants could have benefited from rental assistance if only they knew what aid they had access to. HCA and DWP both recommend that anyone facing rental arrears take advantage of money advice services before options are limited. One or more aid grants could defeat short-term hardships while money advisers could identify a better long-term outcome.