Tuesday, 31 March 2015

Universal credit landlord concerned by rising debt

The housing association at the heart of the first universal credit pathfinder has expressed concern about rising levels of tenant debt.

New Charter Housing Trust Group, which manages homes within the Ashton-under-Lyne pathfinder, said it has seen a 29 per cent rise in people contacting its financial support team in the last year, and a 19 per cent rise in the total amount of debt referred.

On average tenants referred to the Moneycare service have £8,400 of debt.

The figures date from before the start of the universal credit pilot last month, but New Charter chief executive Ian Munro said he is worried about rising levels of tenant debt as a result of the government’s welfare reforms.

He said: ‘These figures show very real hardship across our communities and, whilst we will continue to support our residents in every single way that we can, we need government support to continue to make a difference.

‘The bedroom tax could cost tenants an extra £88 a month but other reforms will make it more difficult for them to manage their money overall.

‘We should be helping people who are in debt, not making money matters more confusing or difficult to manage.’

Under the bedroom tax, working age social tenants receiving housing benefit have their payments cut if they have spare rooms. Housing associations contacted by Inside Housing have said they are already seeing arrears mount up following the introduction of the penalty at the start of April, with some reporting around 50 per cent of affected tenants are failing to cover the shortfall in their rent payments.

Universal credit, which is due to be rolled out across the UK from October, will combine a range of benefits including housing benefit into a single monthly payment that goes direct to the tenant. At present some benefits are paid weekly, with housing benefit often going straight to the landlord.

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