The impact of Universal Credit rollout on housing insecurity in the UK

A country’s welfare system can have a profound impact on the housing security of its citizens. Welfare systems which include adequate provision of housing allowances can act as a ‘buffer’ that prevents an automatic association between persistent low-income, or a sudden loss of income, and loss of housing. In the UK, Universal Credit (UC) has been rolling out gradually since 2013 to replace six working-age means-tested benefits with a single payment. This represents a major change to the welfare system, and its design of long wait periods, increased conditionality and direct payments has led to concerns over housing security impacts.

Using quantitative research methods, this thesis exploits cross-area variation in the timing of UC rollout (arising from the fact that it was introduced in different areas at different times – a form of natural experiment) in order to measure its impacts on housing insecurity. This is carried out by linking data on the timing of UC rollout (at the local authority level) with panel data from administrative/survey datasets on housing insecurity indicators over time

Housing insecurity for financial reasons can occur in four, increasingly severe, stages: (1) difficulties meeting rent payments, (2) build up of rent arrears, (3) legal repossession actions by landlord, and (4) threatened or actual homelessness. This thesis involves four separate empirical studies, with each making use of different data sources to examine UC’s impact on different indicators and stages of insecurity. Empirical studies 1 and 2 are fixed effects panel designs examining the impact of UC rollout, respectively, on rates of landlord repossession actions, and advice sought from Citizens Advice on rent arrears/homelessness issues, within English local authorities. Empirical study 3, which is also a fixed effects panel design, examines the impact of UC rollout on rates of ‘Housing Options’ approaches and official homelessness claims within Scottish local authorities. Finally, empirical study 4 is a difference-in-differences analysis of data from the ‘Understanding Society’ survey, examining the impact of UC rollout on household financial problems.

Overall, the results suggest that, up to 2019, UC rollout was associated with increases in rates of household problems paying for housing/bills/council tax payments, rent arrears advice issues, landlord repossession actions and ‘Housing Options’ approaches. Taken together, these results provide a robust indication that UC rollout has weakened the UK welfare system’s ability to provide housing security to low-income households.