Blavatnik School of Government’s Professor Peter Kemp is among the authors of an independent evaluation of the housing benefit reforms recently published by the UK’s Department for Work and Pensions (DWP).
In 2011 and 2012 DWP implemented a series of reductions in housing benefit entitlement for those who rent privately. The reforms affected about one million low-income tenants and were part of the Government’s fiscal austerity programme.
Prof Kemp's contribution to the evaluation examined how the tenants affected responded to the reforms: from negotiating a lower rent or cutting household expenditure, to finding new ways to increase their income, but also moving home or falling into rent arrears.
“Because the reforms to housing benefit reduced their income, recipients had to take actions to mitigate the impact on their household. Our research found that although housing benefit changes weren’t the reason behind most house moves, they were the most common reason for the increase of rent arrears” said Prof Kemp.
Key findings on how tenants responded included:
- The three most common housing-related actions taken by those affected were: looking at lower rent properties (16%); speaking to their landlord about lowering the rent (16%); seeking advice about their benefits (16%).
- Reductions in day-to-day spending were far more common than housing related actions. The three most common income-related actions to make up for shortfalls were: spending less on household ‘essentials’ (46%), cutting back 'non-essential’ expenditure (38%) and borrowing money from family and friends (31%).
- The proportion of tenants who reported they were in arrears on their rent increased from 10% in autumn 2011 to 12% in autumn 2012; and the cuts to housing benefit had become the most common reason for arrears.
The evaluation - which also looked at landlords' responses and the financial and regional impacts of the reforms in studies undertaken by the Centre for Regional Economic and Social Research at Sheffield Hallam University, the Institute for Fiscal Studies and Ipsos MORI - will inform the UK government on the impact of their policy reforms.
