For the majority of social landlords, rent is the largest source of income for their organisation, so the ability to streamline resources as much as possible in the face of ever-growing challenges is paramount. Setting up sustainable tenancies in partnership with residents can work to prevent fresh arrears, while new technologies are facilitating the recovery of longstanding debt before the six-year point, at which it becomes statute barred and therefore, irrecoverable.
Rent or mortgages are priority debts and a responsibility that the majority of us have to bear. Universal Credit will bring this responsibility directly into the hands of all recipients of the benefit and whilst for some this will be an easy transition, for others who are less financially literate, the transition could jeopardise both their own futures as well as that of a housing provider. These changes have led to a wealth of housing providers across the country diversifying their staff base to increase debt and income recovery roles, as well as wellbeing or social work positions to develop a multidisciplinary approach to income collection.
The impact for housing providers of tenants falling behind on rent is significant and can divert funding away from the staff and schemes that support their most vulnerable tenants. For residents too, the consequences are just as real, with the potential to cause lasting damage. Significant implications, such as wage arrest or eviction should be accounted for at the earliest stages of a tenancy to avoid residents falling into this situation. This journey starts pre-tenancy with thorough checks and co-created plans to ensure that no-one moves into a property that they can’t afford. With both prospective and current residents, it is wise to identify those with poor financial literacy and guide them towards affordable financial products and free advice. A lack of digital capability can also be a factor here, as paying rent, registering notice and other housing-related services are transitioned to a digital format.
“We get involved from when they first go into arrears so things don’t escalate…I guess the issue for them is intervening at the right stage in the right way to ensure it doesn’t escalate… We’re all about prevention and not reacting afterwards and it does make a significant difference.”
Debt is no small issue and can rob a housing provider of the salaries for support staff and other front line services; in Lambeth alone, just 597 multiple debtors owe the local authority over £3million. Without intervention strategies, the in-tenancy and post-tenancy options for retrieving arrears can become more serious. Tactics can include ‘wage arrestment’, which compels employers via the courts to surrender an amount of pay directly to a Housing Association, freezing tenant bank accounts or ‘Exceptional Attachment Orders’ whereby goods are taken from a home and sold at auction. Beyond these extreme measures, an individual may apply for bankruptcy or a Debt Relief Order (DRO), however at this point income cannot be returned to a housing provider unless there is a legitimate case for Housing Benefit or Universal Credit Fraud.
Protection of income, alongside the security and stability of residents are the two core objectives for a housing provider. In recent years, legislation change and limited funding have caused more organisations to collaborate with one other and seek out new partnerships for innovative and efficient solutions. It’s clear that the remit of a housing provider is broadening, alongside a shift in expectation that incomes will be protected by investing in the advice, guidance and co-creation of payment pathways. More than simply income protection, housing providers are working with residents to support and sustain them through more holistic approaches, meaning that debt recovery and prevention ultimately serve to ensure the creation and maintenance of sustainable tenancies throughout a provider’s housing stock.
If you want to know more about how we are supporting housing providers maintain their sustainable tenancies, contact us on email@example.com.