Description of the programme
The ‘Supported Rent Flexibility’ project was devised by the Centre for Responsible Credit, Well Thought Ltd., and Optivo Housing Association and delivered from January 2017 to March 2018. A group of Optivo’s social housing tenants were given the opportunity to set up a personalised schedule of rent payments, allowing them to overpay and underpay at different times of the year.
This opportunity was conditional on tenants interacting with Optivo’s ‘Money Matters’ service and undertaking an annual budgeting exercise to determine the months in which they would most benefit from a reduction in rent payments, and the months in which they could afford to overpay the shortfall.
The pilot was focused on working age, ‘financially squeezed’ Optivo tenants in London and the South East. The tenants were eligible for the pilot if they were:
- Not in receipt of full Housing Benefit;
- Had dependent children;
- Had outstanding rent arrears of up to £500, or had been in arrears in the past year.
The pilot was designed to test whether providing tenants with the opportunity to customise their rent payments could:
- Make it easier for people to pay their rent, without resorting to the use of high-cost credit and without detrimental changes to their living standards;
- Help people to plan ahead, and make it easier for people to save (especially if people reduced their use of credit as a result);
- Improve their overall well-being (for example, by reducing stress and anxiety about money).
In addition, the pilot tested whether or not providing rent flexibility to tenants could increase trust between tenants in financial difficulty and their landlord, and whether this reduced the need for, and intensity of, debt collection activity if they experienced subsequent problems.
The evaluation captured both the outcomes of the initiative, as well as analysing the processes used to design and implement the scheme. A mixed-method approach was used to assess the outcomes, combining:
- Pre and post-intervention surveys with participants which were based on the Money Advice Service’s Adult Outcomes Framework;
- In-depth interviews conducted after the intervention;
- An assessment of rental payment performance among tenants opting into the ‘rent-flex’ programme, compared to a matched control group.
The pilot study recruited 59 tenants who had not previously been in contact with Optivo’s Money Matters service. They were recruited from a pool of 258 tenants who responded positively to an e-mail survey about their financial problems, of whom half (129) were offered the opportunity to trial ‘rent-flex’, and half were assigned to a control group. The final number of participants in the intervention group was 59.
The average level of rent arrears for tenants taking up ‘rent-flex’ was £290, and the majority were single parents in employment.
- There was an increased take-up of welfare benefit payments and other direct financial support. In total, this was worth in excess of £70,000 to the ‘rent-flex’ group/just under £1,200 per tenant.
- There were positive changes among 38 tenants who had participated in ‘rent-flex’ for at least six months. These participants reported that they had a clearer plan for achieving their goals at follow-up than before the intervention.
- These 38 tenants were also less likely to say that they run out of money always or most of the time at follow-up, less likely to use credit to ‘get by’, and reported reduced material deprivation.
- Some tenants participating in the scheme improved their physical and mental health, their relationships with family and friends and to a lesser extent their situation at work. There was also a considerable improvement in people taking control of their finances and forward planning, although – unsurprisingly given the extent of financial difficulty amongst tenants entering the scheme - few had started saving.
- Although only eleven tenants had completed a full twelve months on the scheme at the time of writing, the initial impacts on overall rent payment performance were encouraging, with the majority paying more than their contractual rent and reducing their arrears. In comparison rent arrears were much more likely to have increased in the control group.
- Regardless of the amount of time spent in the scheme, nearly two thirds (63%) of participants had paid at least the amount set out in their agreements as at 31st March 2018. This compares to just under half (45%) of the control group.
- Qualitative interviews with tenants and staff involved in the delivery of the pilot indicated that relationships have improved, with tenants being more trustful of their Housing Association.
Note that due to small bases in some of the findings, percentage changes are not reported.
Points to consider
- The numbers of responses collected from surveys and feedback forms are small, so quantitative results cannot justifiably be reported. The impact evaluation is based on only 11 tenants who completed a full year of ‘rent-flex’ (out of the 59 participants in total), and 17 participants in the control group who had their rent monitored for a full year.
- The evaluation was too small in scale for inferences to be made to the wider population, and therefore caution should be exercised in generalising from the results.
- This research was only undertaken in London and the South East, and as such may not be transferable to the rest of the UK.
- This report is relevant to all stakeholders (particularly housing associations) and policymakers with an interest in incentivising social housing tenants to keep up with their rental payments.
Evaluation of the ‘Supported Rent Flexibility’ - full report