New research by three housing bodies representing
over 1.3m council households, has revealed rising numbers of
tenants in arrears and a significant rise in the level of rent
owed, since the introduction of the under occupation penalty.
The findings are the result of a joint
research project from the National Federation of ALMOs (NFA), the
Association of Retained Council Housing (ARCH) and the Councils
with ALMOs Group (CWAG), into the impact of welfare reforms on
In the three month period March to June 2013, the number of
council households in arrears rose by 21 per cent, with the total
monetary value of arrears rising by 16 per cent for the same
period. Based on the trends identified by the survey this indicates
that nationally local authority rent arrears rose by £17.5 million
in the first 3 months after the implementation of the government's
welfare reform agenda in social housing.
For households affected by the spare room subsidy the results were
even more worrying - with an average of a 59 per cent increase in
households deemed to be under occupying going into arrears.
Particularly hardest hit are tenants and landlords in the North of
England where the proportion of under occupying households in
arrears, increased on average by 104%.
The research also found that 24 per cent of landlords had reported
a rise in empty properties with the associated costs of dealing
with these, and 42 per cent reported a drop in demand for some
types of properties as households struggled to afford larger homes
in some parts of the country.
Commenting on the report ARCH Policy Adviser, Matthew Warburton,
"The survey also confirms that most councils will not have
enough smaller accommodation available in the coming year to enable
more than a small proportion of affected tenants to downsize. This
implies that arrears are likely to go on rising as tenants continue
to struggle to pay."
NFA Policy Director, Chloe Fletcher, said:
"Given the rising cost of living, local authority spending cuts,
and changes to the wider welfare benefits system, it isn't
surprising that councils and ALMOs are finding it more difficult to
collect rent. What is alarming is the speed by which households
affected by the under-occupancy penalty have struggled to maintain
rent payments and the scale of unintended consequences of the
reforms for housing providers in some parts of the county."
The NFA, ARCH and CWAG will continue to capture data from its
members over the year and will monitor and report the policy's
continuing effect on tenants and landlords.
Download a full copy of the
Read the Inside Housing report
The survey was sent to all NFA, CWAG and ARCH members in August
2013 and 28 ALMOs and 17 councils responded.
The NFA, ARCH and CWAG represent just over 1.3m council
properties, 32 per cent of social housing in England. The
organisations are supporting their members across England to
minimise the impact of welfare reforms with a range of educational
and financial measures introduced since April.
The under-occupation penalty or spare room subsidy is a change to
housing benefit entitlement introduced in April 2013 that means
council residents receive less housing benefit if they live in a
property that has one or more spare bedrooms. Tenants judged to
have one spare bedroom will lose 14 percent of housing benefit and
those with two or more spare bedrooms will lose 25 percent of