Evaluation of the 'Supported Rent Flexibility' pilot

1. Description of the programme
2. The study
3. Key findings
4. Points to consider

Description of the programme

[This is an extract from the Executive Summary of the evaluation report. Further amendments may be made to this Summary, pending review by the Evidence Hub partner]

The ‘Supported Rent Flexibility’ pilot was designed and delivered by the Centre for Responsible Credit1, Well Thought Ltd., and Optivo Housing Association from January 2017 through to the end of March 2018. It provided a sub-group of Optivo’s social housing tenants with the opportunity to set up a personalised schedule of rent payments – allowing them to under and overpay on their rent at different points in the year.

This offer was contingent on tenants engaging with Optivo’s Money Matters service and undertaking an annual budgeting exercise to determine the months in which they were most likely to experience expenditure pressures.

The pilot was focused on working age, ‘financially squeezed’, Optivo tenants in London and the South East. These were eligible for the pilot if they were: (i) not in receipt of full Housing Benefit; (ii) had dependent children, and (iii) either had outstanding rent arrears of up to £500, or had been in arrears at any point in the previous twelve months.

The pilot was designed to test whether providing tenants with the opportunity and support to tailor their rent payments in accordance with their own knowledge of likely pressure points over the year could:

• Make it easier for people to pay their rent, without recourse to credit use and without cuts to 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); and
• 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 build 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 study

Our evaluation examined both the processes that we used to design and implement supported rent flexibility within Optivo, and also the outcomes that were achieved for tenants. We used a mixed-method approach to assess outcomes, utilising pre and post programme surveys based on the Money Advice Service’s Adult Outcomes Framework and additional, in-depth, follow-up qualitative interviews. We also assessed rent payment performance amongst those tenants taking up rent-flex in comparison with a matched control group, and accessed Optivo’s data on its CRM system to determine levels and quality of contact with Income Officers and Financial Inclusion staff within the organisation.

The pilot recruited 59 tenants who had not previously been in contact with Optivo’s Money Matters service. These were recruited from a pool of 258 tenants responding positively to an e-mail survey about financial problems, of which half (129) were offered the opportunity to trial rent flex, and half were assigned to a control group.

The average level of rent arrears for tenants taking up rent-flex was £290, and the majority were single parents in employment.

Key findings

Tenants taking up the offer of rent-flex:

• Benefitted from their engagement with Optivo’s Money Matters service. This led to increased take-up of welfare benefit payments and other direct financial support. In total, this has been worth in excess of £70,000 to the rent-flex group - an average of just under £1,200 per tenant using the scheme; and
• Reported improvements in their financial behaviours and well-being, as measured against a range of MAS’ Adult Outcomes. In particular, we saw a reduction in the use of credit to meet essential needs, an improvement in living standards, and a reduction in money worries. 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 planning ahead, although – unsurprisingly given the extent of financial difficulty amongst tenants entering the scheme - few have yet managed to start saving.

Although only eleven tenants have currently completed a full twelve months on the scheme, the initial impacts on overall rent payment performance are encouraging:

• Prior to entering onto rent flex, these tenants had combined rent arrears of £3,277 and average arrears of £290. After a full year on rent flex, eight tenants (72%) had paid more than their contractual rent, reducing their arrears. In some cases this improvement in rent payment performance was substantial. As a group, these eight tenants paid a combined amount of £2,983 in excess of their contractual rent – an average of £372;
• Only three rent-flexers that have completed twelve months in the pilot (23%) have increased their arrears, with most of this caused by changed circumstances such as a loss of employment impacting on Housing Benefit entitlement;
• In comparison, rent arrears are much more likely to have increased in the control group. Seventeen members of the control group have now had their rent accounts monitored for a full year. Of these, eleven (64%) have increased their level of arrears by an average of £1348. Only six (35%) of the tenants in the control group have reduced their arrears.

Looking at the wider rent-flex group (regardless of time they have spent in the scheme). Nearly two thirds (63%) of rent-flexers 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 indicate that relationships of trust have been built. Even where tenants using rent-flex experience financial problems due, for example, to changes of circumstance affecting their Housing Benefit entitlement, they are more likely to maintain contact with staff and act on their advice than the control group.

Points to consider

[To follow]

Full report

Evaluation of the 'Supported Rent Flexibility' - full report