09 May 2003
Housing associations are finding it difficult to collect escalating rent arrears from tenants and 'a major rethink is needed', the Audit Commission warned this week.
A report by the local government watchdog found that performance in collecting rents has deteriorated, with landlords owning more than 250 properties collecting just 93.7% of rents in 2001/02 compared with 94.6% in 2000/01.
Overall, housing associations failed to collect £231m in England and Wales last year – a 10% worse performance than in 2000/01. Because rents make up over 90% of most associations' annual income, the commission warned that such a shortfall 'may require additional borrowing' to cover ongoing debts.
Many associations' debts result from delayed benefit payments. Others derive from UK households on low incomes that 'shoulder' rent arrears in preference to other forms of debt, the report says.
The commission calls on associations and councils to 'shift the focus of tenancy management from penalising default to rewarding compliance'.
PFmay2003
