Universal Credit and rent arrears - autumn 2021

We wanted to understand how people were managing day-to-day living costs and the financial stability of the sector, as well as how the Universal Credit system coped during the coronavirus crisis. In April 2020, the NHF began conducting monthly surveys of its membership to monitor:

• Whether coronavirus was impacting tenants’ ability to pay their rent.
• How this differed depending on whether the tenant was in receipt of Universal Credit.

This has since been extended to understand how changes to the Universal Credit system, alongside the end of furlough, has impacted rent collection.

The survey used questions from our previous quarterly survey to allow us to compare against previous years. For each monthly survey, we asked housing associations to give us data relating to the last day of the month. We asked for data relating to occupied general needs tenancies only.

The aim of carrying out these surveys is to gather information from the same organisations to explore trends in the data. This report summarises results from 27 housing associations who completed each data point on monthly surveys from September to November 2021. Thank you to everyone who submitted data.

We found:   

• Numbers of tenants claiming Universal Credit are rising steadily with a resultant increase in total arrears. 
• There was no immediate, dramatically worse effect on numbers of households claiming Universal Credit or arrears following the removal of the £20 uplift and ending of furlough. When it comes to paying rent, we do not know what other expenses claimants may have waived to prioritise
• Households paying by Universal Credit are more likely to be in arrears and have higher average arrears than households paying by other means. This is concerning given the managed migration of legacy benefit claimants to Universal Credit.
• The proportion of general needs tenancies paying with Universal Credit remains at 33-34% but account for 56-58% of total arrears. 
• There is evidence of a slow increase in total arrears for both payment types, including an increase in average arrears for households paying by other means. This will need monitoring through repeat surveys.