16 November, 2022

The impact of rent rises on your residents – and your organisation

HACT’s latest tool Resident Resilience Insight has been designed to help housing associations navigate the rent increase.

Gavin Cansfield

Chief Executive, settle

The uncertainty around the level of the next rent rise is a real dilemma for the sector. A below-inflation increase will impact our plans for decarbonisation and new developments. Equally, with the cost of living crisis, none of us would have looked to increase rents much more than 7% given the impact on our residents.

As businesses, we can quantify the financial impact on our long-term financial plans – calculating the impact on our residents and their resilience has been less straightforward. Now, thanks to a new tool that has been developed by HACT, housing associations can gain unique insights into the impact rent rises might have on residents, as well as the resulting increase in demand for our services and numbers of households moving into arrears.

The concept of resilience was brought to the fore during the first year of the Covid-19 pandemic. For us at settle – and for many others across the sector – resilience is critical for our residents, as well as the communities in which we operate.

HACT acted on the conversations they had with sector colleagues about the concept of resilience to develop a project with a number of housing associations, including Sovereign, settle and whg. The first step was to agree on a definition of resilience:

A resilient individual is someone who demonstrates the ability to adapt to, and bounce back from, changing and adverse circumstances without detriment to their long-term wellbeing”

The next step was to determine whether there was a framework that could be constructed so that housing associations could measure the resilience of individual residents. In the second stage of the project, HACT and partners identified seven common domains relating to resilience: basic needs; core self; health and wellbeing; financial wellbeing; education, training and skills; social connections; and access to services and support.

Simultaneously, the project team also began to collate a suite of datasets that could be used against each of these domains. Some were commonly held by housing associations. Others were available as open-source datasets.

Following conversations with sector colleagues in June and July, it became clear that there was an immediate need to be able to understand resident resilience, specifically in relation to the proposed rent increases. With this in mind, HACT took the decision to accelerate and build the first module of the Resident Resilience Insight tool – all within eight weeks. Housing associations can now use it to understand and map the impact of different levels of rent increase on the resilience of their residents, on their rental income and on future service demand.

The way it works from a user perspective is simple. You input anonymised resident data, choose different levels of rent increase and then the tool maps each of your residents into one of 27 different cohorts based on three key factors:

  1. Dependency on state benefits
  2. Rent arrears
  3. Frequency of contact with HA

By running the different rent increase scenarios, housing associations can see how many residents might then need some form of intervention or support. Each cohort is then RAG rated, so that organisations can identify which residents are most in need of support, as well as the potential impact on numbers of households going into rent arrears and requiring increased contact with the organisation.

This is just the start of the development of the online tool.

Working with housing association partners, who include Sovereign, settle, Gloucester City Homes, Platform and a number of G15 HAs, HACT will be adding further use cases to the Resident Resilience Insight tool over the next few months.

Learn more about tool and book a demo

Resident Resilience Insight