New research has revealed a sharp rise in rental arrears among social housing tenants, with local authorities seeing a staggering 70% increase in rent owed over the past five years. The findings, gathered through Freedom of Information requests by Access PaySuite, highlight the growing financial pressure on both tenants and social housing providers.
£3.1 million average owed per authority
The data reveals that local authorities providing social housing are now owed an average of £3.1 million in rent arrears per authority, a significant jump from £1.8 million in 2019. This represents a 71% increase over five years. The research also shows a marked rise in arrears over the past year alone, with an increase of 14% compared to March 2023.
It’s not only local authorities facing this challenge. Housing associations have similarly struggled, with the Regulator of Social Housing (RSH) reporting an 8.4% rise in rent arrears in March 2023, reaching a record £800 million. This is the highest annual increase since before the pandemic.
The number of social housing tenants falling into arrears has grown by 17% in the last five years, and currently, 41% of social housing units are in arrears. Additionally, the average amount owed by tenants has risen from £492 in 2019 to £710 in 2024—an increase of 44%.
Local authorities struggling to cope
The strain on local authorities is immense, as they are not only dealing with rising rental arrears but also facing challenges in collecting overdue council tax payments. According to Access PaySuite, if the data from their sample is applied to all 221 local authorities that own social housing, the total value of rental arrears across local government could be as high as £650 million.
An Access PaySuite spokesperson commented: “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 to meet their living costs, whether they rent their property from their local authority, a housing association or a private landlord.”
This financial squeeze creates a difficult balancing act for local authorities and housing associations. While they need to ensure affordability for tenants, they must also cover their essential expenditures and manage the rising operational costs of chasing rent arrears and council tax payments.
Rising costs and arrears burden
With 1.56 million social housing units recorded by the Regulator of Social Housing in 2023, the arrears crisis reflects the broader affordability struggles facing many households. The cost of living crisis continues to impact tenants’ ability to keep up with rent, putting added pressure on housing providers already stretched by budget constraints.
The challenge for local authorities and housing associations is to balance tenant affordability while ensuring they can cover essential services. The growing backlog of rent owed threatens to create further financial strain, not only for social housing providers but also for tenants already struggling with rising living costs.
