BIT has been working with Metropolitan1, a housing association with approximately 40,000 properties, mainly in East Midlands, East Anglia and London since early 2017.
Rent arrears are a challenge for Metropolitan – as they are for many social landlords – with around 15-20% of Metropolitan customers in arrears at any one time. And with Universal Credit replacing the historic benefits system, many tenants will have to manage their own rent payments for the first time, which has led to concerns across the sector about the impact on arrears.
Metropolitan are interested in applying behavioural insights, both to help support their tenants to make better financial decisions, and to increase the efficiency of their Income Team processes.
BIT worked with Metropolitan’s Income and Insight teams to run two RCTs on rent arrears. One trial used behavioural insights to reduce the number of customers entering arrears, and a second trial, still in field, is testing whether changes to Metropolitan’s arrears communications can increase the speed that customers exit arrears.
Reminding customers when rent is due
The intervention to reduce the number of customers entering arrears was very simple, and built on a number of previous BIT trials: we simply reminded customers to pay their rent.
We sent a text message to a control group of Metropolitan customers with a timely reminder when their rent was due. This message included a social norm (that most customers pay their rent on time), was personalised by including the customer’s first name, and was signed by a named person at Metropolitan.
We found that compared to the control group who received no reminder, this intervention reduced the number of customers who entered arrears at least once during the trial period by 5.6% points. This simple and cost-effective intervention led to a relative reduction of arrears cases of 10%.
What can other social housing organisations learn from this?
Many of BIT’s trials have shown that a timely reminder can lead to significant changes in behaviour. A similar intervention to remind tenants when their rent is due could be rolled out at low cost by other social landlords, and may help tenants adapt to Universal Credit.
Behavioural insights can apply to many tenant interactions, and for example can be applied to social landlords’ challenges relating to income, arrears and missed maintenance appointments. This trial builds on results from BIT’s previous work in social housing, including with the New South Wales Government on rent arrears, and Wheatley Group on missed maintenance appointments.
If you would like more information on BIT’s work in social housing, please email firstname.lastname@example.org.
1 Now Metropolitan Thames Valley, following a merger.