Will direct payment cost social landlords £1.27 BILLION PER YEAR? – SPeye Joe

Here’s a piece that builds on the warning that social housing tenants are likely to default on their rent if they believe their landlords are failing to carry out important maintenance work. Yr Obdt Srvt has experience of this but we’ll let Joe Halewood’s article speak for itself first:

This week Moodys, the ratings agency, getting very twitchy and saying that Universal Credit with its monthly payment of benefit to tenants and its direct payment of housing benefit to tenants rather than to social landlords as now, will see costs increase by 6.6%.  In a piece in Inside Housing it said that Moodys…

“…warned that the payment of benefit for housing costs to tenants ‘is likely to increase the risk of non-payment or underpayment of rent’. It pointed to an average 6.6% fall in rent payments recorded under Department for Work and Pensions demonstration projects trialling the payment of direct benefit.”


Inside Housing didn’t comment on this (now there’s a surprise!!) but they should and everyone involved in social housing should sit up and take notice. The national rent roll, the sum of all social housing rents is about £19.5 billion per year (4.1m rents at circa £90pw) so 6.6% of that is £1.27 BILLION PER YEAR

Welfare reform (sic) policy will directly lead to £1.27 BILLION less paid in rent to social landlords each year!!

If, as is widely reported, the bedroom tax has seen about £140 million or so increase in arrears to landlords then direct payments risk at £1.27 Billion is more than EIGHT times a greater financial risk.

An officer from the Welsh Assembly’s fair rent tribunal, with lawyer in tow, visited Vox Political Towers earlier this week (Mrs Mike having appealed against a bid to increase the amount of rent considered ‘fair’ on the building).

As the grounds of the complaint were mainly to do with the landlords’ failure to uphold their side of the contract (by not carrying out repairs, and with work such as grounds maintenance (grass cutting) taking place far less frequently than agreed), this was a perfect opportunity to point out, not only that awarding an undeserved ‘fair rent’ will merely add a burden to the taxpayer in housing benefit, but also that Universal Credit payments to tenants will mean a huge loss of income for social landlords as tenants withhold the money while they wait for the repairs they deserve.

There was no response other than acknowledgement of the comment but when this bomb drops – and it will – at least the authorities will not be able to say they weren’t warned.

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  1. R Jim Edge September 12, 2014 at 1:48 pm - Reply

    Would one be cynical to think this is intentional to drive the privatisation of social housing

  2. hugosmum70 September 12, 2014 at 2:03 pm - Reply

    do social landlords include those renting out in the private sectors? one of my kids lives in a private rented house. she has been with the same estate agent for around 11/12 years .this is the 2nd house she has rented through them.this one she has been in for around 8years. every year they go out to inspect the place and every year there is a long list of things that need attending to that the landlord is supposed to be responsible for. most of those items on the list have been on every list since she moved in there.nothing gets done unless its emergency.(one is the window above the door . very loose putty nowhere to be seen.) every time next door slam their front door it rattles. we live in fear that one day it will drop on someones head and kill them.but there is nothing she can do. she is scared to push too much in case she gets notice to quit.a few of the jobs a friend did for her.
    she doesnt want to lose the house,.she likes both it and the area.

    • Mike Sivier September 12, 2014 at 2:15 pm - Reply

      No – social landlords most definitely do NOT rent out in the private sector. Housing associations are considered social landlords and while they are privately-run companies, they get public-sector concessions and are expected to charge public-sector rents.

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