Decrease in rent arrears, yet potential losses for landlords in millions: a hidden blessing
In a report published by Housemark, a leading data and insight company for the UK housing sector, it has been suggested that targeted support could improve the financial resilience and wellbeing of social housing residents. The report, however, highlights potential challenges that could arise from changes to Personal Independence Payment (PIP) and Universal Credit (UC) for tenants with disabilities or long-term illnesses.
## Expected Impacts
The report outlines several anticipated impacts from the proposed changes.
### PIP Changes
Currently, existing PIP claimants are not expected to face immediate changes. However, the government plans a comprehensive review of the PIP assessment process, which might lead to changes after Autumn 2026. This could potentially affect future claimants or those reassessed with different criteria or amounts.
### Universal Credit Changes
From April 2026, new UC claimants will see a 50% reduction in the health element, decreasing from £97 to £50 per week. However, those with severe health conditions will continue to receive protection. Additionally, over 200,000 people with severe, lifelong conditions will be exempt from future reassessments for UC entitlement. The standard allowance for UC is set to receive a significant increase, providing a much-needed boost to many households.
### Support for Transition
A 13-week period of additional financial support will be provided to those affected by PIP changes, helping them adapt to new conditions or explore employment opportunities.
## Overall Impact on Social Housing Tenants
The uprating of UC standard allowances and protections for those with severe conditions will provide stability for many. However, the potential changes in PIP assessment criteria and the reduction in the health element of UC for new claimants could lead to uncertainty and financial challenges for some tenants. The additional employment support package might help some tenants transition into work or improve their circumstances.
The report urges social landlords to strengthen support for tenants, particularly those with disabilities or long-term illnesses. Despite the positive news, the research also highlighted that changes to PIP and Universal Credit benefits could disproportionately affect the 59% of social housing tenants who live with a disability or long-term illness.
This year, benefit payments are due to increase in line with inflation. However, Jonathan Cox, chief data officer at Housemark, warned that the progress in reducing rent arrears is fragile and that the impact of forthcoming welfare reforms could reverse these gains. The report also estimates that an estimated £23 billion in unclaimed benefits and entitlements remains untapped.
The report analysed data from February 2025 and included 169 social housing providers. Despite the potential impact of the forthcoming welfare reforms on rent arrears not being mentioned in the report, Jonathan Cox warned that these reforms could lead to hundreds of millions of pounds in unpaid rent across the sector. The full report is available for access here.
The report suggests that upcoming changes to both PIP and Universal Credit could lead to financial challenges for a majority of social housing tenants, who live with disabilities or long-term illnesses. Businesses, politics, and the general news should focus on enhancing support for these tenants to counteract the potential impact of the welfare reforms. This is crucial to maintain financial stability in the housing sector and ensure tenants' well-being remains secure.
