NFA Floats Switch To Monthly Rent Collection

The National Federation of ALMOs (NFA) is gathering the views of its members on moving from weekly to monthly rent collection. This is in response to research which found more than a third of tenants on Universal Credit are in rent arrears. The six-week waiting period before a tenant receives their first payment was cited as “frequently a factor” for causing arrears. Although Universal Credit is paid monthly, most social landlords collect rent weekly. Following a meeting with Lord Freud, minister for welfare reform, the NFA has said it will consult its ALMO members to find out if they would support moving from weekly to monthly rent collection to bring Universal Credit and rent payments in line. Any final decision on changes to rent collection would be up to individual local authorities. Read more on Inside Housing.

Behaviour Change Research to Tackle Rent Arrears

Housing associations and local authorities have been invited to participate in a six-month research programme to test how behavioural science can improve rent collection and reduce rent arrears.  The research, by the housing team in Capita’s property business, will investigate how intervention techniques have an impact on the decisions tenants make. Several organisations will each try a different approach to income collection and managing rent arrears, such as changing the language used in text messages and letters to tenants. This will be measured against a control group in each organisation that will not change the way it currently engages with its tenants. Read more on the Capita website.

Universal Credit Staff Costs ‘Unsustainable’

City West Housing Trust carried out a pilot from July 2013 to March this year, to test the direct payment of benefit to tenants ahead of the wider roll-out of universal credit over the next three years. Results from the 14,600-home landlord’s nine-month project, under which 52 tenants received housing benefit direct, show an average rent collection rate of 99.18%. However, management costs, calculated using an estimation of staff time, ballooned during this period from £178.94 for a normal case to £754.88 for a direct-payment project case. This was because of increased expenditure, including home visits to tenants to collect rent and provide support. If this cost were extrapolated across all 2,000 City West tenants set to receive direct payments, the cost would be around £1.2m. This is higher than City West’s £1.1m budget to manage the payments of all 14,600 homes it manages. Read more on Inside Housing.

Impact of Welfare Reform on Housing Associations

According to the latest Ipsos MORI survey of housing associations nearly three in five (58%) say they have been significantly affected by the introduction of the size criteria. The pattern of impact is however variable, with those operating in the north of England most likely to say they have been significantly affected.  At the time of the survey associations estimate that nearly one in five of their working age tenants in receipt of Housing Benefit are affected by the size criteria, and on average, more than a quarter (29%) have fallen into arrears since its introduction on 1st April 2013. Over half (53%) report increased difficulty in rent collection because of the size criteria. Download a copy of the report from the IPSOS Mori website.

Welfare Reforms Are 'Pushing Landlords towards Tipping Point'

New research has revealed the cost of welfare reforms to social landlords. Six months after the introduction of the bedroom tax, patterns have emerged showing a North-South divide, a big/small landlord size split, rises in costs across the board and an increase in empty properties. The report, produced for HouseMark, shows that landlords with poor rent collection rates before the bedroom tax have lost out on millions of pounds since April as they struggle to collect more money direct from tenants. The situation is particularly acute in the North, where collection rates are lagging behind the UK median by as much as nine percentage points. Download a copy of the report from the HouseMark website.

Direct Payment Demonstration Projects - Latest Findings

The DWP has published its latest report into the Universal Credit demonstration projects testing the payment of housing benefit direct to social housing tenants.  Among comments made by housing providers taking part in the projects were;

"Our experience shows that some of the triggers for arrears are: delays in payment, lifestyle changes, change of household and the impacts of welfare reform.” (Oxford City Council and Green Square)

"Having trialled the 12-week arrears level, we believe that 12 weeks has proved to be too long a timeline to trigger switchback, as it enables the rent arrears debt to escalate to a level which can become unmanageable, and difficult for the customer to recover from, particularly where other debts exist.”

(Shropshire Council, Bromford Group, Sanctuary and the Wrekin Housing Trust)

“The rent collection process demands considerably more effort for a lower rate of return.  Staffing levels are well above those for “business as usual” (Bron Afon Community Housing, Charter Housing and Torfaen County Borough Council)

Download a copy of the report from the DWP website.

£500m Rent Collection Bill for Social Sector

The social housing sector spent £500 million on collecting rent in 2011/12, according to Housemark. The provider of performance improvement and value for money solutions to the sector found this its members spent £300m during the period - almost £120 per property per year - and has estimated the cost to the sector as a whole at £1/2 billion. And Housemark has warned that the figure is set to rise in the wake of the government's welfare reforms.  Read more on the HouseMark website.