The portion of the private rental market funded by Universal Credit payments needs a radical overhaul if mass evictions are to be avoided in the coming months, a leading trade body has claimed.
Letting agent accreditation scheme Safeagent has published a blueprint for the sector that it says will help prevent the ‘tsunami’ of evictions predicted by Shelter once the ban ends on September 20th.
“At Safeagent, we want to see a fair, and appropriate system put into place, which ensures tenants who are struggling to pay their rent, and landlords who are facing financial difficulties as a result, have a clear way forward,” the document says.
The suggested measures include:
- Reforming Universal Credit (UC) and letting tenants opt to have their housing element paid direct to their landlord or agent from the outset, side stepping the much-criticised Alternative Payment Arrangements.
- Letting agents who are paid a tenant’s UC housing payments direct should be made to protect the funds via a protection scheme similar to the one that must be used for deposits.
- Increase the Housing Allowance further to prevent shortfalls, and better fund the Discretionary Housing Payments scheme that local authorities can pay to tenants.
- Wider use of legally-binding, transparent and affordable Repayment Plans by letting agents and landlords.
- Lenders should reduce the monthly premiums on a landlord’s buy-to-let loan if their tenant’s Universal Credit payment are reduced and do not over the cost of their mortgage.
- Landlord who get into debt while housing tenants who can’t pay the full rent via Universal Credit should be given a grant to reduce or clear their debt.
- Similarly, landlords who don’t have mortgages should be offered a ‘top up’ facility to get them through the crisis.
“What we need now is less of the vitriol which pervades any discussion around arrears and evictions,” says Isobel Thomson, Safeagent Chief Executive (right).
“Instead, we need collaborative efforts to produce a workable process which will protect the interests of all, as we get through this extraordinarily challenging period together.”