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Arrears rocket for tenants on Universal Credit

Around two thirds of private landlords with tenants receiving Universal Credit have experienced rent arrears according to new research.

Based on responses from over 2,200 landlords, the Residential Landlord Association’s research exchange PEARL has found that 61 per cent of landlords with tenants on Universal Credit have experienced them going into rent arrears. 

This is up from 27 per cent in 2016.

The research found that on average Universal Credit tenants in rent arrears owed almost £2,400, a 49 per cent increase compared to last year.  

Over half of landlords with tenants on Universal Credit applied for direct payment to be made to them instead of to the tenant, known as an Alternative Payment Arrangement or APA.

Where successful it took, on average, over two months for this to be organised, on top of the two months arrears already accrued. This has caused arrears to build up substantially, the RLA says.

Those landlords that have to wait for two months arrears before they can apply for direct payment are reporting that on average the APA process takes 9.3 weeks. 

This when added to the initial two months arrears accrued means that landlords are on average owed four months’ rent before they are successfully awarded direct payment. 

The RLA is calling for the APA process to be improved as a matter of urgency, particularly before managed migration begins next year and more families and complex cases are moved onto Universal Credit.

One fifth of landlords also reported that their mortgage lender prevented them from renting homes to tenants in receipt of benefits.

The RLA is calling for tenants to be able to choose whether to have the housing element of Universal Credit paid directly to the landlord.

It is calling also for private landlords to be given more information about a tenant’s claim, such as when they receive payments, where this is in the best interest of the tenant to sustain the tenancy so that suitable rent payment schedules can be arranged. At present, this is provided to social sector landlords, but not to those in the private sector.

Formal mechanisms should also be put in place to enable landlords to reclaim rent arrears where UC tenants leave a property owing rent, the association says.

  • jeremy clarke

    Never mind, that nice lady from shelter will take them all in to her house, she loves them all and apparently they are better company than nasty landlords!

  • S l
    • S l
    • 15 October 2018 09:18 AM

    if they had been honest, those on housing benefits and universal credit always use the money on themselves eating out having holidays rather than pay the rent as its intended. even with housing benefit being asked to pay to landlord, tenant can and always change it so that no payment goes through and by the time landlord found out and call the council, its already 2 months or more in arrears. even then, the council deny liability to pay and say tenant change their mind soon as they moved into the property. its all a hoax to get housing benefit money without paying for the rent. its easy money to take and nobody bother to chase these fraudster for the rent back because its hard work and its not their own money. its the tax payer money. people like us who work hard and pay tax are being rip off by the government and council to encourage these lazy people to be rouge tenants. hardwork and honesty dont pay in uk

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