Calls for flexible approach to first month’s rent for housing association tenants

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More and more social tenants in Scotland are struggling to pay the first month’s rent in advance as a result of welfare reforms, making it even more difficult for them to find and keep a home, according to two leading housing organisations.

Shelter Scotland and the Scottish Federation of Housing Associations (SFHA) raised their concerns in a joint report, First Month’s Rent Flexibilities, published today, which calls for housing associations across Scotland to be as flexible as possible with tenants over payment of the first month’s rent and for the Scottish Government to increase the level of support available.

They raised their concerns following growing evidence that the roll-out of Universal Credit, changes to the way housing benefit is calculated and the benefits cap are increasing the financial pressures on many households – both in and out of work. They fear a backlog of arrears for both tenants and housing associations which might never be paid off and could be followed by the possibility of eviction and homelessness.

Among several key recommendations was a call to have the option of only one week’s rent in advance and a call for the Scottish Government to introduce a repayable loan system to help new tenants with their first month’s rent.

Sarah Boyack, Head of Public Affairs at SFHA said: “This report highlights the detrimental effects that delayed Universal Credit payments are having on social landlords and their tenants. Delays to housing benefit and poor communication from the DWP places tenants in debt before their tenancy even begins. This situation ultimately undermines the social housing model and instead of sustaining tenancies and supporting vulnerable tenants, puts both landlords and tenants in an even more vulnerable position.

“SFHA will work with its members, the Scottish Government and Shelter Scotland to mitigate the impact of Universal Credit and to find workable solutions which help people to sustain their tenancies.”

Adam Lang, Head of Communications and Policy at Shelter Scotland, said: “It’s vital that homeless households, people on low incomes and people who can’t access other forms of housing can find a home they can afford. Social housing provides that safety net. But one month’s rent in advance for some households is simply not affordable.

“People starting their tenancy in arrears from which they may not recover is not in anyone’s interest, so flexible arrangements such as one week’s rent in advance or introducing repayable loans from the Scottish Government could make the difference between affording a home or not for many households.”

Shelter Scotland and SFHA are making the following recommendations on a local and national level:

Local Level

· Housing associations could reduce the amount of rent up front to weekly instead of monthly, or apply as much flexibility to the first month’s rent as possible.

· There should be a consistent approach to the first month’s rent and what help is available in the area e.g. Discretionary Housing Payments.

· There should be faster processing of Community Care Grants.

· There should be better access to pre-tenancy information and preparation for tenants, including budgeting in the face of changes relating to Universal Credit.

· An assessment for potential financial vulnerability at allocation stage should be introduced in order to better understand tenants’ needs.

· Housing associations should continue to improve their engagement with tenants and prioritise tenancy support meetings.

· Joint working arrangements between local authorities and housing associations should be improved to ensure a holistic service is provided.

National Level

· The Scottish Government should consider introducing a national repayable loan scheme for helping with the first month’s rent.

· More resources should be made available to assist with financial, budgetary and welfare advice.

· There should be an increase in funding for tenancy sustainment activities.

· The Scottish Welfare Fund should be improved and made more responsive to the provision of essential items and funding.