Majority of social housing tenants struggling to pay rent – here’s why

The number of social housing residents struggling to keep up with their rent could be much higher than previously thought, a large-scale study found, with 70% of social renters just about keeping up due to a lack of cash. 

A two-year study into tenancy sustainment in social housing from Sheffield Hallam University looked at the causes of rent payment difficulties and rent arrears.

Academics said the findings shift the stigma some social housing tenants face with residents making significant sacrifices to pay rent.

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Instead, the research found inadequate social security benefits, particularly the introduction of universal credit, are leaving many to fall behind on rent – with arrears affecting housing associations’ ability to build much-needed homes. 

Professor Paul Hickman, from Sheffield Hallam University’s Institute of Social Sciences, who led the study with Dr Kesia Reeve, said: “The research has clearly shown that rent arrears are primarily caused by tenants’ financial circumstances – low income, precarious employment, indebtedness, lack of savings – rather than their budgeting capabilities or motivation to pay. Tenants actively avoid falling into arrears, even if it means prioritising rent payments over other essential items and are generally skilful money managers.”   

Social housing rents are regulated by central government with tenants facing a maximum increase of 2.7% in April – equivalent to the autumn inflation rate plus 1% and down from 7.7% in April 2024. 

While the rate is set annually, the government is set to introduce a multi-year rent settlement to offer social housing providers greater certainty.

But with social housing home to low-income and vulnerable households, researchers found many are struggling to pay their rent.

Academics surveyed 1,213 social housing tenants as well as carrying out 64 in-depth interviews with residents, 67 interviews with social landlords and support organisations, analysis of 38,456 tenant rent accounts and 140 phone conversations about payment issues.

The survey showed 9% of tenants were in arrears but 70% were struggling to pay their rent with many skipping meals, selling possessions, borrowing money or not using heating to keep up.

Researchers also found a higher proportion of social housing residents were in receipt of benefits with 36% of people in paid employment.

That saw 43% of households reporting that their income did not stretch until the next pay day while one quarter were behind on at least one bill and 21% relied on food banks to stave off hunger in the last year.

Meanwhile, almost a third of employed tenants were on casual, insecure or seasonal contracts or worked part-time (42%), while two-thirds of people living in social housing had little or no savings.

Despite limited incomes, analysis of accounts showed keeping up with rent was the priority and that the introduction of universal credit appeared to have increased tenants’ risk of rent arrears.

Professor Hickman told the Big Issue that a shortfall in benefits could have a knock-on effect on the government’s ability to build 1.5 million homes while in power.

He added: “The migration of the final cohort of claimants onto universal credit is likely to have an adverse effect on the costs of social landlords (as they devote more resource to supporting their tenants) and their income (as arrears rates potentially rise), and, in turn, their business plans, in doing so, impacting on their ability to build new homes.”

The Sheffield Hallam University academics have called on the government to rethink its approach to the implementation of universal credit in England and Wales.

They urged ministers to consider giving tenants the option to opt-out of direct payments, as is offered in Scotland, and abolishing the five-week wait for a first universal credit payment.

The household support fund should also be extended beyond April while a minimum income standard should be introduced to inform benefit rates and the national minimum wage, researchers argued.

Dr Catherine Dennison, programme head for welfare at the Nuffield Foundation, who funded the research, said: ”We welcome the team’s systematic analysis revealing the challenges faced by significant numbers of those living in social housing in paying their rent, and the sacrifices that this frequently requires.

“We encourage social landlords and national policy makers to take note of their recommendations, including to work with tenants to maximise their incomes through all available routes.” 

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