Welfare reform and access to social housing
In a speech last month, the Prime Minister promised to “help more people on to the housing ladder – and ensure that those who cannot afford to own their own home also have a decent place to live“. This renewed focus on access to decent housing for renters is a welcome development. Unfortunately policies intended to provide decent housing for renters often conflict with welfare reforms.
I am currently working with the Chartered Institute of Housing and CaCHE to assess how welfare reforms have affected access to social housing. As part of this work, we are running a survey of social housing providers where we hope social housing providers will share their experiences of this issue.
Our work so far suggests that welfare reforms introduced since 2010 represent a major challenge for housing associations. A recent report for CaCHE presents the key findings of research which was conducted by Paul Hickman, Jenny Preece and myself. We explored the impact of welfare reforms on housing associations and reviewed the existing evidence base on this subject. One of the key themes to emerge from our research was a concern that housing associations are finding it more difficult to let properties to households on the lowest incomes.
There is some evidence that housing associations are becoming more risk-averse in relation to accommodating people who are in receipt of benefits, with a stronger emphasis on pre-tenancy affordability assessments and the prevention of under-occupation. Whilst many housing associations expressed clear statements against rejecting tenants on affordability grounds, it was also apparent that tenants may be rejected for higher-cost products like Affordable Rent. In a context where the majority of new supply is let at Affordable Rents, this has potentially far-reaching implications for who can be accommodated by housing associations.
Tenancy sustainability was the overwhelming rationale given by housing associations for assessing affordability. One housing association argued that it was “not in a tenant’s interests if you…get a property and then the tenancy fails within the first year because it wasn’t affordable”. Another stated that their priority was for someone “to get a home that they can live in successfully, for as long as they possibly can”. Affordability was seen as an important part of this, with a housing association saying “what’s the point in allocating somebody a tenancy that they basically can’t afford? It’s just going to fail”.
Welfare reforms are often linked to decisions about allocation of tenancies. The Size Criteria (or Bedroom Tax), for example, led to one housing association adopting a more “risk-based approach” to allocating properties. Another housing association reported that they were being more “proactive in terms of the allocations process” to avoid allocating tenancies which would not be financially viable. Other housing associations reported relaxing restrictions on tenants transferring to new properties whilst they had outstanding rent arrears. They wanted to ensure that households could downsize if they were affected by the Size Criteria.
One of the difficulties for housing associations is predicting which tenants will fall into arrears. There appears to be increased use of tools such as credit checks prior to offering a tenancy but one association highlighted the “weak link between a credit check and someone having a good record of paying their rent”. This is partly because rent arrears often arise from unanticipated events. Another housing association expressed their frustration with the difficulties of predicting arrears saying: “if you’ve got a tool that can tell me when someone’s going to lose their job, then that’s great, but you haven’t got it”.
Welfare reforms are an ongoing issue for social housing providers. Our research highlighted particular concerns about Universal Credit. There is little comprehensive evidence about the impact of Universal Credit on housing associations’ income, partly because of delays in its roll-out. The evidence so far suggests that the arrears rates for tenants on Universal Credit are higher than for those for on ‘traditional’ Housing Benefit. Direct payment has a negative impact on arrears and there appears to be a particular increase in arrears as households transfer onto Universal Credit.
We are interested in hearing whether our initial findings reflect the experiences of different types of social housing providers. In particular, we want to know how welfare reforms have affected other types of social housing providers including Arms Length Management Organisations and local authorities with directly managed housing stock. The link to the survey can be found here if you know a social housing provider who would be willing to support this research.
Dr Ben Pattison is a Research Fellow at the Centre for Regional, Economic and Social Research (CRESR) within Sheffield Hallam University.
 All quotes from housing associations can be found in our research report.
Date: October 8, 2018 9:00 am
Author(s): Ben Pattison
Categorised in: Wider Drivers