Councils near ‘crisis point' as millions owed in rent

Hundreds of millions of pounds are owed in rental debts to councils and arrears are on the rise, new data shows, as campaigners warn the shortfall will lead to a “crisis point” for councils.

- HOLLY BANCROFT

Hundreds of thousands of social housing tenants owe money to their local authority, with the number of homes in rent arrears increasing by 8 per cent from 2019 to 2023, increasing pressure on cash-strapped councils and leaving those in debt facing homelessness.

Freedom of Information (FOI) data from 82 local authorities – around a third of the number of councils which own social housing – shows more than £240m was owed in rent arrears in June/July this year. This is up from £147m owed in 2019, according to analysis from payment specialists Access PaySuite.

Experts and charities pointed to rising rent costs, changes to the benefits system and entrenched inflation as causes of increasing rent arrears.

Suzanne Muna, co-founder of the Social Housing Action Campaign, said: “Chancellor Rachel Reeves has just promised social landlords that they will be allowed to raise social rents by the annual inflation figure plus 1 per cent. This is far too high. It follows the 7 per cent social rent rises in 2022, and 7.7 per cent in 2023.

“Wages have just not kept pace for most people, and are unlikely to do so over the next 10 years.”

Ms Muna added increasing rental debts and losses to council income “will eventually reach crisis point”.

One man who wanted to be known only as Dave, 50, moved into his council house in Crystal Palace, southeast London, at the beginning of June but is already in £216 of rental debt.

Dave, who is Malaysian and has been granted refugee status in the UK, said he was struggling to adapt to the move from Home Office accommodation to supporting himself in a council home.

He said: “Coming from one system to another system, you are already in debt because you have no savings. The rent arrears started because they pay one month behind, and nobody told me this is how the system works. So the first day I moved into the property I was already in rent arrears.”