Housing Associations and Universal Credit – a time for trend spotting

Anthony Shephard, associate director at Mustard, argues why the introduction of Universal Credit means it’s more important than ever for Housing Associations to monitor awareness, perceptions and behaviour in the areas of budgeting, affordability and payments.

A little over a year ago we ran a discussion on one of our online communities about welfare reform and Universal Credit.

For those of you that don’t know much about Universal Credit, it is a new benefit that has been gradually introduced since 2013 and is expected to be fully implemented by the end of 2017. It is for people that are both in and out of work and merges benefits including job seeker’s allowance, income support and housing benefit (some of which are currently paid weekly) into one single monthly payment.

The main objective of the research was to understand more about consumer knowledge, understanding and their perceptions of the reforms’ pros and cons.

The discussion was a real eye-opener for us and gave us a glimpse into the sentiment of what UK citizens truly think about the reforms.

The research revealed that there was a level of concern about the reform which focussed mainly on an individual’s ability to budget.

Now there are two trains of thought on this:

a) The introduction of Universal Credit will lead to people taking control of their finances and learning to budget responsibly, subsequently improving the financial capability of individuals.


b) The introduction of Universal Credit will lead to people struggling with budgeting. Some struggle with managing money on a day-to-day basis so will struggle even more with having to make their own payments and ensure their money lasts for a whole month.

As a key sector for Mustard, we have been considering how this might affect Housing Associations. Well, the implications are likely to be significant. As there is greater onus on individuals to make rental payments there is real concern that some people will not be able to make their payments on time, if at all. The knock on effect of widespread defaults would be disastrous. It may lead to tenants being evicted. It may lead to private landlords becoming more risk-averse and refusing to agree terms with people on benefits.

Housing Associations are no longer just providers of homes – they play an integral part in local development, building communities and, in some case, providing healthcare and other social care support services to their tenants. So it is going to be an interesting transition period, not just for individual tenants and landlords, but also for the many Housing Associations across the UK. Awareness, understanding and behaviour will need to be monitored more closely than ever.

Mustard has managed several research projects for different Housing Associations. Whilst it is not yet clear what the full impact of Universal Credit will be and what this will mean for the housing sector, one thing that we can be sure of is that Mustard and our Housing Association clients alike will be keeping our eyes firmly on the full implementation and transition during the rest of 2016 and into 2017.

If you wish to discuss any issues raised in this blog, or any housing-related projects, then please get in touch with the team or call us on +44 (0)161 235 5270.