Poor tenant data and outdated IT pose huge financial risk to social housing landlords
10th February 2015
Social housing landlords are facing a potential financial crisis because their IT systems are not ready to cope with the major new changes to welfare reforms, according to a new study.
The research also found that landlords are unable to access some of the most basic data on their tenants. The independent study, carried out by Sheffield Hallam University on behalf of Housing Partners, found that because of the deficiencies in data and IT systems, landlords are ill-equipped to deal with the Government's Universal Credit reforms. Nearly nine out of 10 landlords do not have access to the data they need to manage the introduction of the direct payment of housing benefit to tenants. Many are struggling to identify individual vulnerable tenants who potentially should not move onto direct payments or will need extensive support. This finding helps explain why many landlords support a change in the law to allow the Department for Work and Pensions (DWP) to share universal credit claimants' personal data with social landlords, councils and charities. However, the survey of 172 social housing landlords, carried out by the Centre for Regional Economic and Social Research (CRESR) at Sheffield Hallam, also found landlords don't have the necessary technology to deal with the policy change - with significant social and financial implications. It follows earlier research by Sheffield Hallam into pilot direct payments projects - commissioned by the Department for Work and Pensions - which found that tenant arrears were almost five times higher using the new benefit system set to be established nationally by 2017. Professor David Robinson, who led the study said: "These figures show that landlords are bracing themselves for financial difficulties following the introduction of direct payment. It will have a major impact on their operations and more than one-third consider direct payment to be a threat to their financial viability. "Virtually all landlords (98 per cent) expect to see an increase in rent arrears, one-third expect direct payment to impact on their relationship with institutional lenders and one-quarter consider direct payments to be a threat to their new build programme." Only 20 per cent of landlords said that staff could easily access information about the vulnerabilities or support needs of tenants and 33 per cent reported that this information was difficult to access. Recent changes in the law might help landlords access better data, but over half (56 per cent) of landlords said that their IT system was limiting their ability to prepare for direct payment. Richard Blundell, CEO of Housing Partners, added: -The implementation of direct payments represents a huge shift for all housing providers, and what this study shows is how vital it will be to have the right data and more importantly, be able to utilise it is. "Landlords must be able to support their most financially vulnerable tenants if these reforms are not to have huge financial implications for all parties. "With the survey showing that landlords estimate 26 per cent of tenants will struggle to pay their rent even with maximum support, the need to have the right information and the right technology to take advantage of it is even clearer. Because on the whole customer data is so siloed across Landlord organisations, only 5% of respondents felt it would be 'very easy' to pull clear tenant profiles together the study found. CRESR will be holding two events in association with Housing Partners to assess the findings of the research and discuss solutions to mitigate risk. The first of these will be at Sheffield Hallam University on 23 April. To book, delegates should contact firstname.lastname@example.org