A Business Case

Financial Impact of Debt Advice for Social Landlords

April 2011

The Financial Inclusion Centre has been commissioned to undertake an exciting new longitudinal research with six of the of the country’s most established housing associations to analyse the effectiveness of a range of debt advice interventions on the rent arrears and behaviour of indebted social housing residents.

The study, funded by the Friends Provident Foundation, will establish if there is a business case for social landlords to provide debt advice services for its residents. The study will concentrate on analysing a representative sample of data from indebted residents who have received debt advice via their landlord and those who have not, tracking changes to their rent arrears levels and patterns as well as landlord interventions. This will be undertaken both retrospectively prior to the debt advice as well as the tracking of current year data. It will also speak to residents that have received the service and gauge their feelings on the impact and effectiveness of the debt advice.

This interim ‘State of Play’ Report provides the context for the final research outlining the challenging  environment facing both social housing residents and their landlords, the current scale of debt and rent arrears, why social landlords should address the financial problems of their residents, how they are currently tackling the problem and the resources being invested.

Key headlines from the interim report

• The need for effective debt advice is expected to grow as the financial health of social residents deteriorates in the face of adverse economic conditions and forthcoming welfare benefit reforms.

  • · Social landlords face a ‘double whammy’ of rising arrears and reduced financial resources (as a result of deficit reduction measures).
  • · Costs of evicting residents are seen to be increasing with an estimated £39.1 million being spent in 2008/09 by the sector removing general needs residents in rent arrears.
  • · Provision of free independent debt advice services, particularly face-to-face support is expected to diminish as sources of funding from local and national government are significantly curtailed.
  • · This research study is extremely timely, providing a much-needed business rationale for social landlords to invest in effective debt advice interventions for their overindebted residents.

The final report with detailed findings and recommendations will be published towards the end of 2011.

Summary Report – Financial Impact of Debt Advice for Social Landlords 010411

Full Report – Financial Impact of Debt Advice for Social Landlords 050411