Rent Arrears Rise In South Wales
Some parts of the UK are currently taking part in pilot schemes to test the government’s new benefits reforms and in one of them at least, the indications are not good.
Huge increase in non-payment of rent
Social landlords in Torfaen, South Wales, have seen a seven-fold
increase in rent arrears since the introduction of the Universal
Credit test scheme. In the existing benefits system, Housing Benefit
is a separate payment normally paid directly to the landlord. Under
the government’s reforms, Housing Benefit will be rolled up into
Universal Credit and the whole amount will be paid directly to the
tenant. This puts the onus on to the tenant to pay their rent, which
in a lot of cases in the pilot area of Torfaen, is simply not
happening.
Rent arrears rising
One social housing landlord in Torfaen, a community housing project
with more than eight thousand properties on its books, has seen rent
arrears rise from £20k to nearly £140k in the seven months since the
scheme was introduced. Tenants with previously good credit records
are falling into debt because they cannot manage their money. Up
until now the number of evictions has remained low, but this will not
be the case for long.
Bedroom tax
Another change on the horizon that is likely to cause havoc in the
social housing sector is the so-called “bedroom tax”. If a tenant has
a spare bedroom in their rented home, it will be deemed as
unnecessary, and therefore the housing benefit they receive will be
reduced. This change is designed to reduce the number of under
occupied properties, but it will also lead to a rise in the number of
tenants unable to afford their rent.
