Why is rent-flex needed?
Rent-flex offers a digital platform for flexible payment arrangements to be put in place quickly and without the need for a tenant to call an Income Officer. It also encourages tenants to think further ahead than just the month in which they are having problems, and to put in place plans for the year which are realistic given what they already know of their likely financial ‘pinch points’.
The platform provides tenants with the opportunity to come back at any point and reschedule payments based on changes in circumstance.
Tenants are required to complete a brief support needs questionnaire each time they create a proposal. Proposals are risk assessed, and Income Officers provided with a summary of the proposal, support needs, and risks which enables them to make better decisions as to whether to accept the payment plan or refer to other services to assist with the tenant’s underlying problems. The platform is a better way of engaging tenants who may be having financial problems and will ensure better and more consistent decision-making within collection teams.
Are there figures to show that rent-flex reduces arrears?
A full evaluation of the manual ‘proof of concept pilot’ is available online here. The pilot indicated that there were two main benefits for tenants.
Firstly, the onboarding process identified their support needs, and led to maximisation of incomes through, for example, benefit take-up. Sixty percent of tenants in the pilot benefitted from this, with an average income increase of just over £1500 per year.
Secondly, rent-flex allowed people to avoid borrowing from high-cost lenders and to plan for the year ahead. In some cases, people were able to use the flex in their rent payments to clear a payday or other high-cost loan. This meant it was easier for them to pay their rent.
For 15% of tenants there was a significant improvement in their rent account balance compared to the year prior to joining the scheme. On average, these tenants were £337 in arrears immediately prior to starting Rent-flex. However, by the end of their year in the scheme this group had an average credit balance of £4. The average improvement in this group was therefore £341.
How does rent-flex integrate with housing management systems? Does it require additional internal resourcing to manage the rent accounts?
The current trial with Optivo requires tenants who have signed up to rent-flex to be flagged on their housing management systems, so that in months where they have agreed to underpay they are not identified as being in arrears. Monitoring of the payments against rent-flex agreements is then undertaken by the rent-flex digital platform. At the moment this is done through a once per month reconciliation using a CSV file upload procedure.
However, the next stage development is to put in place an API which will read rent payments into the platform in real time and allow for a smoother monitoring of payments against plans. We expect this API to have been developed by the autumn and will be involving both Optivo and any new trial partners in this. We hope to bring in trial partners with different housing management systems so that we can use these trials to test the API in different settings (e.g. by ensuring compatibility with RentSense and other software used to monitor rent payments).
Is rent-flex offered to new tenants or only to those who have been a tenant for at least 12 months?
In the Optivo trial the scheme is offered to new and existing tenants who meet the other eligibility criteria. We are open to discussion regarding potential trials with only new tenants, as this could potentially embed rent-flex as the default option for rent payment for these when they sign up to a tenancy.
Please explain the exclusion for people subject to the benefit cap?
One of the critical factors to rent-flex is that people can afford the payments that they select in the months when they are ‘overpaying’. In the Optivo trial, a decision has been taken that households subject to the benefit cap are struggling to repay their rent and could not afford to pay more in these months. In these cases, Discretionary Housing Payments are often needed pending further work with the household to identify a long-term solution.
Are housing providers the only ones using this software?
Yes, at the moment. However, if the platform was tweaked then it could provide for other bill payment flexibilities, such as Council Tax.
How long before we start to see this level of flexibility built into other examples of our day to day essential spending?
We could tweak the platform with reasonable ease to provide a ‘Council Tax flex’ scheme, but we would prefer to look at how we could incorporate additional bills such as Council Tax alongside rent to create a ‘bill-flex’ scheme. Ultimately, the timescale for that depends on the appetite of local authorities, utility companies, and others to engage with the trials and work with us on its development. We expect that getting the scheme right with rent first will lead to those developments over the course of the next three to four years.
How are accounts managed when people are not paying as they have proposed?
The rent-flex platform checks actual rent account balances against expected levels under the plan on a monthly basis, and automatically contacts the tenant if payments are not being made to plan. It first invites the tenant back to the platform to reprofile their plan for the remainder of the year to bring things back on track, but if payments remain out and the gap grows it can also send communications to ask the tenant to contact their Income Officer for more support.
Is the year considered to be the financial year?
No, the year is 12 months from whenever the tenant onboards to the scheme and creates their first proposal. If changes to the rent account happen in that period – such as an annual rent increase – then the tenant is alerted to this and invited back to reprofile their payments based on the up to date liabilities.
What are the operational challenges of using rent-flex?
Challenges include mitigating the risks in the initial on-boarding stages, but also when changes of circumstances occur over the year. The platform allows tenants to come back and reprofile at any point and this can include resetting their payments to a ‘normal’ flat, equal instalment, profile if need be. Importantly, the platform sends an e-mail to all tenants every month and asks how they have been doing and encourages early return to reprofile if they are having any problems. And whenever a tenant reprofiles their plan, they complete the support needs questionnaire again so these can be identified and actioned.
As a charity we are predominantly supported housing with universal credit and housing benefit - residents still fall into arrears due to their personal contribution.
The platform has been built to handle tenants with housing benefit entitlements, and we are taking people on Universal Credit into the scheme in the current Optivo trial. The only exceptions in these cases are people on full housing benefit where this is paid direct to the landlord and people on Alternative Payment Arrangement for UC. We can apply the platform to personal contributions for service fees etc. and would be keen to explore this further.
How do officers manage these cases when the detail for their rent flex agreement is saved outside of their housing system?
A flag is placed on the main housing management system to indicate that a tenant is on rent-flex.
The rent-flex platform provides income officers with a log in to an interface which shows them the proposals that have been submitted, together with the support needs questions answers and risk assessment. They can filter the list of tenants by patch and can perform bulk actions to approve or defer payment plans pending further support. They can also view individual records and take decisions on that basis.
Moving forwards, we want to explore how we can better integrate the rent-flex platform with the main housing management systems.