By using this website, you agree to our use of cookies to enhance your experience.
Graham Awards


Industry body warns of Universal Credit 'disaster' for private rental sector

A trade body is warning that the government’s new Universal Credit payments could have a disastrous impact on private lettings with increasing numbers of landlords saying they will refuse to rent to tenants on benefits.

Research carried out by the Residential Landlords Association shows that landlords are frustrated with the new system, which sees benefits paid directly to claimants who are then responsible for paying their own bills including rent.

Landlords have criticised the way the Department for Work and Pensions handles enquiries and say the process for requesting direct payment from government is too long.


One landlord told the RLA: “The Universal Credit system is mysterious, unresponsive and devoid of communication. I have made three applications. I received one payment, but no statement and I have no idea what the payment was for. I have not received any communication in response to the other applications. There are very long delays which are unacceptable as arrears mount and I still have to pay the mortgage with no rent income. This is a disaster and will result in increased homelessness.”

The transfer from Local Housing Allowance to Universal Credit has also been severely criticised by the RLA, which says there are numerous complaints about missing and delayed payments leaving tenants in arrears. This is leading many landlords say they will no longer rent to any benefit claimants.

One landlord told the association: “I will stop renting to people on Universal Credit as I won’t get rent to cover mortgage payments. The system whereby tenants get payment rather than the landlord is shambolic, universally disliked, makes tenants vulnerable to addictions and homelessness and prevents landlords from renting to people in receipt.”

Richard Jones, RLA policy adviser, says the association appreciates some effort has been made by the Department of Work and Pensions, but insists more should be done.

“Universal Credit and associated reforms make it harder to rent to people on low incomes or housing benefit and we have a building body of evidence that the changes are making it harder for people in difficult situations to get their lives back on track. The issue is whether the DWP can deal with the scale of these issues, given that they have only been dealing with the simple cases do far.”

  • Jon Wilson

    I'm no expert on UC, but as far as I'm aware it can be requested to have what they call 'Alternative Payment Arrangement' on the same basis it can be done with local Housing Benefit offices. I've not heard any evidence on how this works in practice in comparison to direct payments as they work with local HB offices. I could foresee problems as the DWP will be administering HB/LHA 'centrally'. Any one had any experience of direct payments under Universal Credit to share?

  • icon


    Firstly, there are no experts on UC at the minute. Even the DWP accept It's a work-in-progress, especially (my emphasis) in relation to the "housing element" or housing costs.

    You're right to point out "Alternative Payment Arrangements" (APA) do exist, amongst other things, permitting payment to the landlord, instead of the tenant. You can also recover rent arrears accrued by your tenant during their residency. Plus the numbers of redirections from tenant to landlord have increased dramatically in the past year or so, with some of my Housing Association clients securing 50-60% of tenants' "housing element".

    However, private landlords are not generally experiencing the same success. The APA process is seriously flawed. DWP staff are blinded by Data protection and "confidentiality" issues and often use the blanket of confidentiality to refuse PRS landlords and agents any information. On many occasions the DWP continue to make payments (after the APA has been made) despite having the ability to suspend that part of the award, resulting in tenant misuse of the "housing element. All of this could so easily be avoided. As a result, I receive regular referrals from RLA members who have already lost substantial rental income caused by DWP maladministration of the APA scheme, so much so, I write to DWP hierarchy almost every week pursuing their legitimate complaints and have already secured "compensation" for their loss.

    If you're a private landlord with a sizeable LHA caseload you really need to make the effort to establish just how different UC is to LHA. You'll be surprised, and more than a little concerned, when you discover UC's hidden complexities and associated risks. The RLA runs courses for PRS landlords and agents in different cities; you can find some details here: http://www.rla.org.uk/landlord/courses/landlord_universal_credit_training_course.shtml The autumn/winter programme is just being finalised.

    For any landlord who encounters problems with LHA or Universal Credit you can contact me here: http://universalcreditadvice.com/private-landlords

    Bill Irvine


Please login to comment

MovePal MovePal MovePal
sign up