A MANSFIELD housing association is warning that the forthcoming welfare reforms are likely to lead to a large increase in rent arrears.
Asra Housing Group, which has an office in Leighton Burroughs and owns and manages about 1,400 homes in the Mansfield area, believes the benefit changes may lead to hundreds of people living in the area falling into debt and in some cases becoming homeless.
The Group knows that 180 of its tenants in the local area will be affected by the forthcoming Bedroom Tax, which means they are under-occupying their homes and will lose some of their housing benefit if they don’t down-size.
Matt Cooney, Group Chief Executive, said: “From April the Bedroom Tax will affect 13% of our customers living in the Mansfield area. We are working very hard to ensure all affected customers are aware of their options and if they would like to move we are here to help them.
“But this is just the tip of the iceberg as from October, this year, customers will be paid their housing benefit directly rather than it being paid to their landlord. Trials of this model from elsewhere in the country have found that rent collection fell by as much as 8%. This is a significant drop and will mean thousands of people will potentially fall into rent arrears and the local housing sector will be expected to absorb these hefty losses.”
The warning comes on top of recent Ipos Mori and University of Cambridge research, commissioned by the National Housing Federation, about the impact of the changes on housing providers.
The national research found eight out of ten housing associations expect rent arrears to rise, whilst 15% expected rent arrears to double. On average housing providers expect rent arrears to increase by 51%.
Previous research by Policis for the National Housing Federation found almost a third of working age social tenants in Britain (one million people) will need extra support to help manage their budgets when, under Universal Credit, their housing benefit is no longer paid directly to landlords.
National Housing Federation Chief Executive David Orr said: “Within a few short months, hundreds of thousands of low-income families will see their housing benefit cut as a result of the Welfare Reform Act. Many could fall behind on their rents, putting at risk the roof over their heads.
“Housing associations are doing their best in tough circumstances to cushion the blow for their residents. But there is still a lot of uncertainty, including in Government, as to the full impact of its reforms. We need more time to understand and prepare for the impact of these massive changes to the welfare system.
“In these difficult times, the best way to help residents manage their finances is to allow them to continue having their support for housing costs paid direct to their landlord. Otherwise we are in danger of seeing rises in homelessness and families really struggling to make ends meet.”
From April the Bedroom Tax, changes to Council Tax Benefit and changes to Disability Living Allowance are due to come in. From October Universal Credit and the Benefit Cap are due to be implemented.
For full details of all of the benefit changes visit www.asra.org.uk/changesahead2013.