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Landlords Suffering Because Of New Benefits System

 
07/11/2018

Landlords Suffering Because Of New Benefits System - Giving It 'No Credit' Just A 'Universal' Damnation

24th Oct 2018

Just under two thirds of landlords have and are experiencing their Universal Credit tenants racking up rent arrears.

man strapped for cash
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Research from a trade association found that those landlords who had UC tenants taking part in the poll, 61% had suffered from rental arrears. Because of the fast track rollout of the new benefits system since the middle of 2017, the number of Universal Credit tenants going into rental debt has risen from 27% in 2016. 

A spokesperson for the association said the results of the survey shows that it is of paramount importance for immediate changes to be made to Universal Credit. 

He said: “We welcome the constructive engagement we have had with the Government over these issues but more work is needed to give landlords the confidence they need to rent to those on UC.

“The impact of the announcements from the Autumn budget last year remain to be seen.

He continued: “However, we feel a major start would be to give tenants the right to choose to have payments paid directly to their landlord – this would empower tenants to decide what is best for them rather than being told by the Government."

The survey discovered on average that Universal Credit tenants had fallen into rental arrears of £2,400 – this is a 49% increase from last year's average debt.

53% of landlords had to apply for direct payment of rent with UC tenants - the Alternative Payment Arrangement (APA).

For those lucky landlords that the APA was agreed with it took them on average two months to receive their first payment, and this was on top of having to 'fund' two months worth of rental arrears already accrued. Landlords are owed four months' rent before they can receive their first UC direct payment.

The association is demanding that the APA process must be dramatically and quickly changed before the so called 'managed migration' and prior to the full UC rollout, which will eventually include all families signing onto Universal Credit.

20% of landlords stated that lenders would not allow them mortgages if they rented to tenants on benefits.

The association is urging the government to make it possible for all benefits tenants to be given the choice to have their rent paid directly to the landlord.

The association also wants landlords to have the information available of a tenant's claim which includes their payment dates so as to arrange the best date for the tenant's rent to be paid.
Source
http://www.pims.co.uk/news-article/landlords_suffering_because_of_new_benefits_system/
 

 

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