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Universal Credit crisis: half of tenants in arrears, say landlords

Landlords tell RLA of many other difficulties they face renting properties to tenants in receipt of the benefit as it's rolled out by government.

Nigel Lewis

universal credit

Half of all tenants in receipt of Universal Credit are going into arrears and causing problems for landlords, it has been claimed.

Research for the Residential Landlords Association among its membership found that 54% of those with tenants claiming the benefit had fallen into arrears of, on average, £2,187.

The vast majority of these problems occurred when tenants made their first claim for Universal Credit or migrated to it from another benefit, the RLA’s report shows.

These difficulties for landlords mean 57% said they would be unwilling to rent to tenants in receipt of the benefit.

Bureaucracy

Dealing with the Universal Credit can also be frustratingly slow, it has also been revealed.

Landlords who asked for their tenant’s benefits to be paid directly to them via an Alternative Payment Arrangement had to wait six-and-a-half weeks for the money to begin arriving.

Link to Lettings news“The system only provides extra support once tenants are in rent arrears,” says David Smith, Policy Director at the RLA (left).

“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.”

The RLA also asked its membership about their portfolio plans, and found that more landlords had sold properties than bought them, and that 31% were considering selling a property at the moment, the highest level recorded.

DWP response

A DWP spokesperson told the Negotiator: “Many people join Universal Credit with existing rent arrears, but this number falls by a third after four months, and the number of landlords reporting Universal Credit tenants experiencing rent arrears has fallen over the last year.

“The best way to help people pay their rent is to support them into work, and Universal Credit is helping people to get into work faster and stay in work longer than the old system.

“We continue to work closely with landlords and tenants to make improvements to Universal Credit where necessary, including 100% advances available from day one of a claim.”

Read more about Universal Credit.

Read the RLA report in full.

 

August 23, 2019

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