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Karbon sees rent arrears rise amid cost of living crisis
A large North East landlord has blamed the cost of living crisis for the uptick in rent arrears and launched a working group to help struggling tenants.
Karbon sees rise in rent arrears as its ups efforts to help tenants #UKhousing Newcastle-based Karbon Homes, which operates around 30,000 homes, said arrears rose to 3.58% in the year to the end of March 2022 – up from 3.28% the previous year.
“This has been largely driven by increased pressure on household budgets as a result of the cost of living crisis,” the association said. “As customers face higher energy, food and other costs, rent payments are more likely to be missed.”
The landlord said it has established a cost of living working group to boost awareness of its services and “target resources at customers most in need”.
Lee Forrest, manager of Money Matters at Karbon, told Inside Housing: “Since the beginning of the year, we’ve seen a notable increase in the number of customers coming to us for support.
“We’ve experienced an increase in rent arrears and caseloads, attributed directly to the cost of living crisis, with our customers on the lowest incomes finding it increasingly difficult to meet their rent payments and reduce their arrears.”
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In its most recent quarter, to the end of June, Mr Forrest said arrears cases had rose by 2.5%, with 9,050 residents in deficit.
The working group has given tenants advice around managing bills and budgeting, paying rent and accessing government grants and discounts, Mr Forrest said.
Karbon’s annual results also revealed it missed its social housing completions target as it blamed delays on pressures around labour and materials.
The landlord developed 458 social homes in the year to the end of March 2022, which was 64 fewer than its target.
However, the figure was up on the previous year when 440 social housing homes were handed over.
Sarah Robson, director of development and regeneration at Karbon, said the delays were due to “ongoing issues throughout 2021, such as trade and material shortages, community consultation and planning determinations taking longer than usual and land acquisitions taking longer than programmed”.
In its current year, the landlord is aiming to develop 770 social homes, which is 2.6% of the properties of this tenure it owns.
Overall, the association is aiming to build 4,000 homes by March 2028.
Around half of the homes will be developed with the £131.5m that Karbon secured in funding from Homes England’s Affordable Homes Programme. At least half of these homes are either underway or in the pipeline, Karbon said.
Despite the negative impacts, the association reported a 62% jump in post-tax surplus to £35.7m, helped by a 9% rise in turnover to £155.2m.
The landlord’s revenue from social housing lettings increased to £135m, up from the £120.2m the prior year, which produced an operating surplus of £37.8m.
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