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Written by rosalind renshaw

Details of the Government’s new procedures for the payment of universal credit have been released and they confirm that a private landlord’s right to insist on direct rent payments if a tenant is in arrears will be scrapped.

The Residential Landlords Association, which represents around 15,000 private landlords, reacted with anger.

It said that when the new benefit system is introduced, payments will be made directly to tenants ‘and it will be up to them to pay their rents or not’.

Currently, Local Housing Allowance is paid directly to tenants who live in private rental accommodation. However, landlords can ask for it to be paid to them if the tenant falls into arrears or is declared vulnerable.

With universal credit – due to come into force next year and include benefits such as housing allowance – the new procedures will apply across the board to local authority tenants, housing association tenants and tenants in the private rented sector.

The RLA has raised a number of serious concerns about the proposals, saying that there is no right of redress for landlord if things go wrong, and that the whole concept creates risk for landlords. It has also attacked the proposals for lack of clarity, saying they have replaced ‘regulations’ with ‘guidance’.

It says that landlords will become increasingly unwilling to accept tenants on benefits.

Richard Jones, the RLA’s policy director, said: “We strongly believe that the Government’s whole approach is flawed, and although the objective of helping tenants to manage their financial affairs is in isolation a laudable one, the Government has wholly failed to appreciate the consequences of this.

“There will be a much higher level of arrears, an unwillingness of landlords to house benefit claimants (at a time when there is huge pressure on social housing), increased unwillingness by banks to lend for this kind of property (or increased interest rate to reflect the risk), much higher levels of evictions and much greater homelessness.”

Comments

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    A person should have the same human rights if they are on benefit or working and not be judged by landlords as being trustworthy or not that's why universal credit will give equal rights to those on benefit and those not on benefit. Anyway 70% of the uk population will be on universal credit at one time or another in their working life so why discriminate against a majority
    Http://www.credit-crunch.synthasite.com a dream come true end of benefit apartheid in uk

    • 13 January 2013 12:54 PM
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    Please sign the petition !

    http://www.InsideHousing.co.uk/tenancies/petition-calls-for-rethink-on-direct-payment/6522600.article

    • 04 July 2012 16:31 PM
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    @ Industry Observer

    I agree with your sentiment. The landlord MUST fulfil his obligations. Even make this a condition of allowing the direct payments. I think you were making a point that 'bad' landlords aren't doing their job properly but getting direct payments. I am standing up for the decent landlord.

    • 04 July 2012 08:54 AM
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    @ G SILVER

    And should that rent be paid direct to the landlord even if he is not fulfilling his obligations under LAT 1985, or is breaching the tenant's peaceful occupancy rights inhis attempts to collect the arrears?

    @ Hawkeye

    NBS does not offer cover for what - contents insurance?

    Or is this refusing consent to let?

    • 03 July 2012 12:44 PM
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    @G Silver

    A petition is all very good but no matter how many names there are on it, it will be interpreted as one petition. However with say 1000 individual letters of complaint this would carry far more weight than a petition as this would be 1000 very irate individuals. Petition gathering is real easy to do but not effective.

    I vote my distaste for any HB prospect by not dealing with them.

    Look up Nationwide BS terms and conditions, and I quote:

    'Please note: we do not offer cover for DSS tenants, holiday homes or long term unoccupancy (over 60 days)'

    • 03 July 2012 08:39 AM
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    It is hard to believe that only Ian Duncan Smith and Lord Freud are adamant that all future benefits are to be grouped together and paid to each claimant. Great idea but DO NOT include the LHA (Housing Benefit element).

    We all know this will NOT be paid as rent and we all have stories to show what a bad decision this is.

    The only way I can think that may help is to sign the petition on the link below (description below the link)

    Lets all stand together and let common sense prevail.

    http://epetitions.direct.gov.uk/petitions/35479

    Universal housing benefits to be paid to landlords

    Under new rules to be introduced next year, any housing benefit allowance will be paid direct to tenants, even if they are in arrears & not the landlord. This will not only subject the landlord to financial pressure and possible repossession, but also increase the likelihood of landlords refusing to take housing benefit tenants, which will increase pressure on local councils and housing associations who will also not be able to request direct payments to them. The government needs to take on board our views, that tenants who receive housing benefit directly and NOT pay their rents are not financially responsible and therefore should it should be allowed that rents can be paid direct to their respective landlord when they are in arrears as per the current rules, failure to take on this common sense approach will cause more issues for the government – this is common sense and a logical solution to all concerned, both tenant and landlords - pay rent direct to landlords

    • 03 July 2012 08:15 AM
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