CRESR

The impact of welfare reform on social tenants and landlords

The introduction of Universal Credit was at the heart of the Coalition Government's programme of welfare reform.  It represents one of the most important changes to the welfare system for many years.  Under Universal Credit, claimants will receive one monthly benefit and be responsible for payment of all out-goings, including rent.  This represents a major change for social tenants, who previously had their Housing Benefit paid directly to their landlord.  The government believes that this approach will help replicate the budgeting skills that people need when working and will help break the cycle of welfare dependency that they consider to be a feature of the current benefit system.  CRESR's national programme of research and analysis has tested this logic and revealed the impact of direct payment on tenants and landlords.

CRESR led the three year national evaluation of the Government's trial of direct payment of Housing Benefit to social tenants in six demonstration projects across Britain.  Tenants were revealed to encounter various difficulties managing direct payment and there was an increase in rent arrears for participating landlords.  Welfare reform is also driving a transformation in the way that housing associations operate, as commercial pressures rub up against their social mission. The need to secure rental income, for example, appears to resulting in some landlords adopting a more risk averse approach to lettings and closer scrutiny of the financial circumstances of potential tenants.

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