Universal Credits Will Lead To an Average Increase in Rent Arrears of £180

Law firm Winckworth Sherwood - whose clients include over 200 social housing providers, housebuilders and funders – has expressed concerns that a move to one monthly payment under Universal Credit will see a significant increase in rent arrears as tenants in social housing struggle to adjust.  Nikki Lynds-Xavier, a partner in Winckworth Sherwood’s Housing Management team said: “A pilot involving some 2,000 tenants in the London Borough of Southwark that concluded earlier this year has shown some worrying indications.  Tenants who started the pilot with no rent arrears found themselves on average £180 in debt at the end of the pilot.” The pilot involved 1,500 local authority tenants and 500 tenants of Family Mosaic housing association.  The pilot found:

    *Only 60% of tenants successfully moved onto the pilot, with 40 per cent failing to successfully manage their monthly budgets;

    *11% refused or were unable to engage with the local authority;

    *14% were later deemed too vulnerable to take part; and

    *That there was a lack of understanding about personal finance amongst tenants, with others unable to open a bank account.

Read more on the Winkworth Sherwood website.