Social landlords face losing £1.4 billion of rental income a year as a result of welfare reform, according to a new report.
The membership organisation Housemark’s welfare reform club, which will track the effect of changes to the benefits system, has collected data for 350 social landlords between 2009/10 and 2011/12, which it will use as a baseline against which to measure subsequent changes in costs and performance.
Its research shows that the social housing sector spends more than half a billion pounds every year collecting rent. London-based organisations have the highest rent arrears and collection costs, at £83.03 per property. Landlords in Wales have the lowest direct costs, at £53.31.
The surveyed landlords, who manage around two-thirds of the UK social housing stock, charge about £13 billion a year in rent. Housemark, set up by the Chartered Institute of Housing and the National Housing Federation, estimates rental income to be worth £20 billion to the sector as a whole.
According to the report, 2010/11 was a high point for rent collection from tenants, with a median rate of 99.59%. It suggests every 1% drop in rental income is worth almost £200 million to the sector.
A report published in December by the Department for Work and Pensions on its direct payment demonstrations projects, which are testing aspects of direct payment of housing payment to social sector tenants ahead of changes that form part of universal credit, revealed an overall collection rate of 92%.
Housemark concludes that if rent collection rates for social landlords drop by around seven percentage points, they will lose £27 million a week in rental income – £1.4 billion a year.
The DWP has released more information from the direct payment pathfinders since the Housemark report was compiled. Figures published this week show the average rent payment level across the schemes has risen to 94 per cent.
Kate Youde
No comments:
Post a Comment