Wales politics

Rent arrears 'threaten housing associations' viability'

Media playback is unsupported on your device
Media captionRhondda Taf CAB reports an increase of 165% in the number of people in rent arrears this year

The viability of housing associations could be under threat because of people falling behind on their rent, it has been claimed.

A social housing group said associations' ability to repay loans could be damaged if their income falls.

Meanwhile, the head of a Citizens Advice Bureau (CAB) in the south Wales valleys has warned benefit changes could force more tenants into arrears.

The UK government said it wanted to make the welfare system fairer.

Rhondda Taf CAB has reported an increase of 165% in the number of people in rent arrears in the current financial year.

Its chief executive Erika Helps told BBC Wales' Sunday Politics programme that changes to housing benefits in April will mean more tenants struggle to pay their rent.

'Money owed'

"We've seen really significant increases in people coming to us with rent arrears and obviously that's given us big cause for concern as the welfare reform changes are starting to impact more people are going to see themselves struggling to pay their rent in the future," she said.

"We're going to see a lot more people coming to us with financial difficulties, needing help in budgeting and managing their benefits in the future.

"The short-term problem is that people are going to get pursued by their landlords who are anxious to recover the money that they're owed."

From April, council and housing association tenants who receive housing benefit will be assessed to see how many bedrooms they need.

Those deemed to have spare rooms will get less benefit - a change dubbed the "bedroom tax" by the UK government's political opponents.

Ms Helps said that landlords were already talking to people about how the benefit changes will affect them.

Nick Bennett, chief executive of Community Housing Cymru - which represents housing associations - said a fall in the rental income for social housing providers will damage their ability to repay some £1.5bn in loans that were borrowed to build thousands of homes.

"When it comes to the housing association model, rent is the income stream which helps generate the income to service the debt that we borrow - the £1.5bn we borrow to increase the supply of affordable housing in Wales," he said.

"The housing association model has been probably the most successful public private partnership in western Europe and these changes really do threaten the viability of that model."

A Department for Work and Pensions spokesman said: "Our reforms are not about making people homeless.

"They're about restoring fairness to a system that has been spiralling out of control.

"It's right that tenants in social housing who are living in homes that are larger than their needs make a contribution towards their rent or move to more appropriately sized accommodation - and this is exactly what people renting in the private sector do."

He said the department did not expect many people would have to move as a result of these changes.

Local councils could access £155m to help families as well as £30m a year to support disabled people with an adapted property and foster carers, he said.

The Sunday Politics is on BBC One Wales at 11.25 GMT on Sunday 10 February.

More on this story

Around the BBC

Related Internet links

The BBC is not responsible for the content of external Internet sites