According to consultants Baker Tilly, while the impact of welfare reform on the social housing sector has so far been less significant than expected, housing providers should still be wary of downgrading the risks.
The company’s benchmarking survey of 70 housing providers to assess the impact of welfare reforms found that the average rent arrears during 2013/14 was 3.3 per cent, slightly down on the 3.9 per cent anticipated in the same survey last year. However, providers also predicted that rates would rise to 4.1 per cent on average in 2015/16 once the wider roll-out of universal credit takes effect.
The housing providers reported an increase in voids of 4.1 per cent during 2013/14, but expected them to fall to 3.7 per cent during 2015/16.
Almost 70 per cent of the housing providers in the survey reported that they had taken on additional members of staff in the last 12 months as a direct response to welfare reforms, with two-thirds of them recruited to permanent roles including welfare benefits advisers, rent collection and debt recovery officers.
Gary Moreton, head of social housing, Baker Tilly, said, “Our survey suggests that housing providers have coped well with the removal of the spare room subsidy and the introduction of the benefit cap, but the risks from the introduction of universal credit haven’t gone away, particularly as evidence from the universal credit pilot areas clearly shows that more tenants go into arrears when moved onto universal credit.”
