80% rise in rent arrears is expected by housing providers
- 04 Nov
Social housing is preparing for an 80% rise in rent arrears due to government welfare reforms, reports study.
Baker Tilly, a law firm, found that the average level of rent arrears was 2.64% in the year ending 2013 but it was due to rise in 4.82% in 2014-15.
The findings are supported by Baker Tilly's back office benchmarking which found that housing providers were budgeting for debts of 1.85% in the current financial year which is up from 0.86% last year, which is a rise of 115%, reports 24dash.
84% of respondents said that they had hired additional members of staff as a direct response to welfare reforms, and a further 11% said they were planning on taking on additional staff to support their tenants through the changes.
Data suggest that approximately 73% of housing association tenants are on at least one form of housing benefit.
Gary Moreton, Baker Tilly's head of social housing said: "Social housing providers are devoting significant time and resource preparing for the potential impact of welfare reform, but there is still a great deal of uncertainty about what the future may hold for rent arrears and bad debts, and the type of housing stock required to meet tenant needs."
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