The Impact of Universal Credit Rollout on Housing Security: An Analysis of Landlord Repossession Rates in English Local Authorities

Abstract

Housing allowances within the UK’s welfare system help protect low-income households from eviction. Universal Credit (UC) has faced criticism for threatening this with its long wait periods, increased conditionality and monthly direct payments. However, there is currently a lack of robust, national-level quantitative analysis on UC’s housing security impacts. This article addresses this, exploiting cross-area variation in the timing of UC rollout to assess its impact on landlord repossession rates within 323 English local authorities. A fixed-effects panel design was used, linking data from UC’s rollout schedule with Ministry of Justice data on legal repossession actions from 2012 Q1 - 2019 Q1. Results suggest that UC ‘Full Service’ rollout, on average, led to an increase of 1.74 landlord repossession claims, 1.42 landlord repossession orders and 0.70 landlord repossession warrants within local authorities (per 10,000 rented dwellings). This corresponds to a 4–5 percent increase on pre-rollout rates. UC’s impact tended to increase the longer it had been rolled out. Where ‘Full Service’ had been rolled out for 12+ months, it led to an increase of 2.60 landlord repossession claims, 2.89 landlord repossession orders and 1.09 landlord repossession warrants (per 10,000 rented dwellings), corresponding to a 6–10 percent increase on pre-rollout rates.

Universal Credit and Crime

“…UC The regressive distributional impact of UC may have been amplified by the delays in benefit payments. 19 To mimic a typical salary, UC payments are made in arrears once a month directly into the claimants' bank account. Given that payments take one week to reach the bank account of the recipient, the first payment should be received around six weeks after the original application.…”

“…20 The higher volume of sanctions has decreased the amount of benefits received by subgroup of individuals that failed to meet the requirements imposed by the Claimant Commitment. 21 We note the larger majority of recipients being sanctioned are male and in the 16-24 age 19 Late payments can arise because the verification process is not completed on-time (either by DWP or the claimant), claims are amended at a late stage, or any other sort of technical difficulty. 20 Prior to the Welfare Reform Act 2012, the maximum period for which a claimant's benefit could be stopped for a breach of the rules was six months.…”

Universal Credit and Crime

“…The regressive distributional impact of UC may have been amplified by the delays in benefit payments. 19 To mimic a typical salary, UC payments are made in arrears once a month directly into the claimants' bank account. Given that payments take one week to reach the bank account of the recipient, the first payment should be received around six weeks after the original application.…”

“…The impact of Universal Credit has been widely criticized and it has generated enormous controversy. Mounting evidence in sociology, political science, and medical literature suggests Universal Credit has led to increased food bank usage, consultations in general practices, landlord repossession rates, and created mental health difficulties amongst claimants (Arie, 2018;Loopstra et al, 2018;Cheetham et al, 2019;Hardie, 2020;Wickham et al, 2020). This paper contributes to the Economics literature by providing the first empirical evaluation of the criminogenic effects of Universal Credit based on quasi-experimental methods and high-frequency data.…”

The impacts of benefit sanctions: a scoping review of the quantitative research evidence

“…One area concerns the housing impacts of benefit sanctions, in terms of rent arrears, eviction and homelessness. A recent UK study by Hardie (2020), examining the effects of the recently implemented Universal Credit programme (which merges pre-existing meanstested working-age benefits), found that benefit conditionality and sanctioning were associated with increased landlord repossession rates. An additional area where we found either inconsistent or limited evidence concerns child well-being, including educational and health outcomes.…”