Social housing providers bracing for benefit changes

A piece of good news for people looking for a job is that providers of social housing are hiring more staff to deal with evictions. However, this may be bad news for anyone that is on a low income and that receives benefits, as it is expected that the welfare reform changes will continue to make it more difficult to pay rent on time.

One of the UKs leading accounting firms, Baker Tilly, is showing that while the level of rent arrears is still manageable, it is expected to increase in 2015 due to ongoing welfare reforms such as the Universal Credit. The reduction in local welfare schemes may also lead to an increase in housing problems across the UK, and the changes to the bedroom tax are also causing problems.

While the level of rent arrears may go up, it is expected that many tenants will continue to live in their flats or homes as the result of the lack of alternate homes to live in, or maybe solutions being found with their landlords. So even though many tenants may fall behind on their rental payments, the homeless rate may not increase as greatly as some fear.

In 2014, the rent arrears per cent was over 3, but it is expected to increase to over 4 percent in 2015 according to survey’s done by Baker Tilly. While this may not seem like such as a big change, it is equivalent to a 33% increase year over year, and this will create challenges for any organisation that provide social housing. Many social housing providers are taking steps now to prepare for this.

Social housing provider actions being taken

There are three main steps now being implemented, in advance of the wider roll out of the Universal Credit. Providers are hiring more staff, changing policies, and starting down the path of offering budgeting advice.

Almost 70 per cent of social housing providers have hired more people in roles such as collections or as debt advisers, and two thirds of them are full time staff. This new positions will also offer free advice on the welfare changes. So this is a positive for the job market across the nation.

The results of the Baker Tilly survey show that many landlords continue to fear Universal Credit being implemented, and some of the initial pilot markets where it is being used show the number of families falling into arrears has in fact increased. So the additional staff will try to mitigate the risk.

New policies are also being implemented, and this ranges from providing tenants advice on various benefits that can help them to staff to ensure all rent money is collected on time. So the providers are starting to be concerned with all these new welfare changes, and are doing something about it.

If someone needs a job, call an organisation that runs social housing. On the other hand, current tenants, watch out, as it appears from the results of Baker Tilly as if many experts fear the worst.