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TODAY'S OTHER NEWS

Tenants’ arrears up because of Universal Credit - claim

Universal Credit is causing tenants to fall behind with their rent according to lettings sector trade body the Residential Landlords Association.

It reports that 54 per cent of those private landlords who have let to tenants on Universal Credit in the past 12 months have seen them fall into rent arrears. 

Of these, 82 per cent said that the arrears only began after a new claim for Universal Credit or after a tenant had been moved to UC from housing benefit. 

And 68 per cent of landlords said that there was a shortfall between the cost of rent and the amount paid in Universal Credit.

Private landlords renting to Universal Credit claimants can apply to have the housing element paid directly to themselves when a tenant has reached two months of rent arrears. 

This is known as an Alternative Payment Arrangement. 

The RLA research suggests that it took landlords an average of almost 8.5 weeks for an APA to be arranged it means that landlords can be left with almost four months of rent arrears before they begin to receive the rent they are owed. 

Among landlords with tenants in receipt of housing benefit, 62 per cent said that they were worried that their tenants might not be able to afford to pay their rent when they migrate to Universal Credit.

The research further found that 36 per cent of landlords said that they had buy-to-let mortgage conditions which prevent them from renting to benefit claimants.

The RLA is calling on the government to do more to prevent rent arrears occurring in the first place including giving all tenants from the start of a claim for Universal Credit the ability to choose to have the housing element paid directly to their landlord.

It also wants the five week waiting period to receive the first Universal Credit payment to be scrapped along with reform of the Local Housing Allowance freeze to ensure it reflects the realities of private sector rents.

According to the most recent statistics, 45 per cent of households receiving Universal Credit with support for housing costs are in the private rented sector.

David Smith, Policy Director for the RLA, says: “The research shows the stark challenges the government still has in ensuring Universal Credit works for tenants and landlords.

“The system only provides extra support once tenants are in rent arrears. Instead, more should be done to prevent tenants falling behind with their in the first place.

“Only then will landlords have the confidence that they need that tenants being on Universal Credit does not pose a financial risk that they are unable to shoulder. Without such changes, benefit claimants will struggle to find the homes to rent they need.”

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