Universal Credit has been an “ideological error” for the 1.2 million tenants on housing benefit within the system as well as landlords and agents, it has been claimed by Stephen Lloyd, MP for Eastbourne (pictured, right).
This is despite the Chancellor’s measures in his budget last November, which attempted to mitigate the financial stress of those moving to Universal Credit falling into rent arrears as they awaited payment.
Stephen’s comments came during a debate he led in the House of Commons this morning during which speakers from all sides of the political spectrum savaged Universal Credit and its effect on the housing sector.
As well as dramatically increasing the number of people presenting themselves to councils as homeless after being evicted from private rented properties for rent arrears, Universal Credit has made many private landlords reluctant to rent to claimants, he said.
“Many years ago I warned that this would be a car crash, and it has become one,” he said.
Quoting figures given to him by the Residential Landlords Association, he said 87% of landlords will not rent their properties to Universal Credit claimants and that among those who did, 38% have experienced rent arrears problems.
He then called for payment of rent to be made directly to landlords and not to tenants, a system that used to exist in the UK and that was kept in Northern Ireland despite Universal Credit being introduced, where he says rent arrears are negligible compared to England.
During the debate one speaker highlighted a landlord in the North East who had 20 tenants on Universal Credit, 18 of whom were in arrears and nine of whom eventually had to be evicted.
“Section 21 evictions are going through the roof in England, “ he said.
“The RLA says one in three landlords have attempted to evict a tenant recently, 60% of whom were in rent arrears because they were claiming Universal Credit.
“Many landlords are nervous about tenants on low incomes in general too, not just those claiming benefits, because they worry they may soon apply for Universal Credit and then go into arrears.”
Stephen Lloyd also claimed that if the system of direct rent payment to landlords was re-introduced, it would double the number of privately rented properties available to claimants, and drastically reduce homelessness and evictions.
“Then it would become the positive, progressive benefit it was supposed to, not the car crash it has been so far.”