Abstract
AbstractHousing allowances within the UK’s welfare system help protect low-income households from eviction. Universal Credit (UC) has faced criticism for threatening this with its long wait periods, increased conditionality and monthly direct payments. However, there is currently a lack of robust, national-level quantitative analysis on UC’s housing security impacts. This article addresses this, exploiting cross-area variation in the timing of UC rollout to assess its impact on landlord repossession rates within 323 English local authorities. A fixed-effects panel design was used, linking data from UC’s rollout schedule with Ministry of Justice data on legal repossession actions from 2012 Q1 - 2019 Q1. Results suggest that UC ‘Full Service’ rollout, on average, led to an increase of 1.74 landlord repossession claims, 1.42 landlord repossession orders and 0.70 landlord repossession warrants within local authorities (per 10,000 rented dwellings). This corresponds to a 4–5 percent increase on pre-rollout rates. UC’s impact tended to increase the longer it had been rolled out. Where ‘Full Service’ had been rolled out for 12+ months, it led to an increase of 2.60 landlord repossession claims, 2.89 landlord repossession orders and 1.09 landlord repossession warrants (per 10,000 rented dwellings), corresponding to a 6–10 percent increase on pre-rollout rates.
Highlights
A country’s welfare system can have a profound impact upon the housing security of its citizens, as adequate welfare support towards housing costs generally prevents an automatic link between job loss, or persistent low-income, and eviction (Stephens et al, )
In the UK, housing allowances are targeted at low-income households, and this can play a significant role in preventing eviction for financial reasons (Pleace and Hunter, p. ). This is threatened by the flagship Universal Credit (UC) welfare reform, which has been rolling out gradually since to replace six working-age means-tested benefits
In terms of trends during ‘Full Service’ rollout, Figure shows mean rates in, with local authorities separated into UC ‘Full Service’ (UCFS) and non-UC ‘Full Service’ areas, i.e. local authorities where ‘Full Service’ had rolled out and local authorities where it hadn’t fully rolled out by that quarter
Summary
A country’s welfare system can have a profound impact upon the housing security of its citizens, as adequate welfare support towards housing costs generally prevents an automatic link between job loss, or persistent low-income, and eviction (Stephens et al, ). UC involves monthly direct payments, i.e. claimants are by default paid once per month, directly into their own bank account This is a novel design – previously benefits tended to be paid fortnightly with Housing Benefit paid to a claimant’s landlord (UK Government, ) – and has implications for housing security as those who lack budgeting skills, or who ‘borrow’ from UC’s housing element for other essential costs, will struggle to meet rent payments These design issues have led to criticism of UC, with widespread concerns that its rollout may increase rent arrears, evictions and homelessness (Citizens Advice, , Homeless Link, ) This has culminated in the United Nations Rapporteur on extreme poverty and human rights stating that “many aspects of the design and rollout of the [UC] programme have suggested that the DWP is more concerned with making economic savings and sending messages about lifestyles than responding to the multiple needs of those living with [ : : : ] housing insecurity” The analysis tracks each local authority over time between Q and Q , exploiting cross-area variation in the timing of UC rollout to assess its impact on repossession rates, controlling for unemployment rates, wages and rents
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