"Finding a long-term solution to the challenge of rising arrears is a complex challenge. However, in the meantime, there are important steps that local authorities can take to support their tenants and make rent collections as simple as possible"
- Alex Common - Access PaySuite
Public sector payments specialist, Access PaySuite, part of Access Group, has created the Rental Arrears Index by submitting Freedom of Information requests to local authorities.
The analysis shows that local authorities providing social housing are owed on average £3.1 million per authority in rental arrears. This has increased by 71% from an average of £1.8 million in 2019.
As well as the jump over the last five years, authorities have also seen a significant jump over the last year – with Access PaySuite’s analysis finding a 14% increase when compared to March 2023.
It’s not just local authorities facing the challenge of surging rental arrears in social housing. In March this year, the Regulator of Social Housing recorded an 8.4% rise in rent arrears reported by housing associations - hitting a record high of £800 million - the highest single year jump since before the COVID-19 pandemic.
Local authorities have seen a similar picture, with the number of tenants falling into rental arrears increasing by 17% over the last five years. On average, 41% of social housing units are currently in rental arrears.
The research found that the value of rental arrears per tenant has increased from £492 in 2019 to £710 in 2024, an increase of 44%.
221 local authorities in the UK own social housing, with a total of 1.56 million units of housing stock recorded by the Regulator of Social Housing in 2023.
Alex Common, Divisional Director, Product and Engineering, Access PaySuite, said: “Social housing budgets have been squeezed significantly over recent years. On top of this, the cost of living crisis has caused real difficulties for many people in meeting their living costs, whether they rent their property from their local authority, a housing association, or a private landlord.
"If we apply our representative sample across the 221 local authorities which own social housing, the total value of rental arrears across local government could be as high as £650 million.
“For local authorities and housing associations, this creates a challenging balancing act between affordability for tenants, while meeting costs for their own essential expenditure requirements. Alongside rental arrears, local authorities are also spending significant amounts of time chasing overdue council tax payments, all of which are adding to their operating costs.
“Finding a long-term solution to the challenge of rising arrears is a complex challenge. However, in the meantime, there are important steps that local authorities can take to support their tenants and make rent collections as simple as possible.
“At Access PaySuite, we understand that housing associations' and local authorities' priorities are to deliver high quality services and drive better public sector outcomes for all their customers, citizens and communities. This includes providing accessibility, financial inclusion and a great customer experience as well as choice and flexibility in ways to pay, which marry affordability with cost effective payment collection, whether that's face to face, by phone or online."
