Report warns of rent arrears crisis

Posted on 07 February 2022

Hyde Foundation has supported a new report by cross party think tank, Demos, which explores the experiences of people in rent arrears in social housing. Published today (7 February), The Bottom Line is clear, there is no evidence of widespread misspending among people in rent arrears.

As already experienced by Hyde Foundation, the Demos report warns that amid the cost of living crisis, life will be made even harder for renters in financial difficulty, and could risk sending more social housing renters into arrears.

The report finds that there are two main drivers of social housing renters falling into arrears: low and fluctuating income, and large and unexpected costs.

It sets out recommendations for social landlords, government, and mental health support services to help prevent people from falling behind rent payments, and to help people already in arrears, including:

  • Government should introduce a dedicated ‘arrears loan’ scheme to expand the new vulnerable tenants fund
  • Social landlords should partner with credit unions to enable tenants to take advantage of membership benefits, and offer flexible rent options
  • Government should urgently reduce the five-week Universal Credit delay and issue more Alternative Payment Arrangements in order to prevent more people from going into arrears
  • Mental health support services should engage with social landlords to ensure tenants are offered access to mental health support when struggling financially, and to ensure landlords are aware of mental health crises occurring within their tenant population.

Kerry Starling, Hyde’s Director of Communities and Social Impact said: “We supported this report because we wanted to better understand the drivers behind rent arrears, and how as landlords, we can best support our customers in financial difficulty. We wanted to learn how we can develop our services further, with the customer at the heart of decision making – whether it’s money and debt advice, support to access health and social care services, resolving complex benefit issues, or helping our customers into jobs and training.

“We’ll use the research and findings of this report, to help shape the way we collect rent. We always encourage our customers to talk to us as soon as they are in difficulty. But, following on from the report’s recommendations, we’ll be looking at ways to connect with them even more and build that trust. We’re going to strengthen our relationships with organisations such as credit unions, and continue to invest in innovative approaches to alleviate hardship for our customers. We also want to share the report’s findings, and our subsequent approach, to allow others to adopt and develop best practice, therefore making a real impact on the sector.”

In addition to a focus group, Demos conducted a series of interviews with social housing residents that have been in rent arrears in the last year, based on financial diaries kept by the residents over a month.

Ben Glover, Deputy Research Director at Demos, said: “It's become all too common for renters to be in financial difficulty over recent years, and with a new cost of living crisis, life could get even harder for these renters. With low income and high costs two of the main reasons why renters tend to fall into arrears, the rising cost of living may inevitably push those who are already vulnerable over the edge and into arrears - resulting in a rent arrears crisis.

“Our report is clear: there's no evidence of widespread misspending among people in rent arrears. Government and housing associations have a duty to urgently help those already in arrears, and prevent those who are struggling or vulnerable from getting into a similar position.”

To read the full report, visit the Demos website.