New research reveals impact of Universal Credit on PRS

RLA says the extent to which landlords with tenants on UC now experience rent arrears reinforces the need for “urgent change”.

Almost two-thirds of private landlords with tenants receiving Universal Credit have experienced them going into rent arrears according to new research.

Based on responses to the Residential Landlord Association (RLA) from over 2,200 landlords, the RLA’s research exchange, PEARL found 61% of landlords with tenants on UC have experienced them going into rent arrears.

This is up from 27% in 2016.

RLA Policy Director, David Smith, said the research reinforced an “urgent need” for further changes to UC.

“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.

“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,” Smith said.

The research found that on average UC tenants in rent arrears owed almost £2,400 – a 49% increase on last year.

Over half (53%) of landlords with tenants on UC applied for direct payment to be made to them instead of to the tenant, known as an Alternative Payment Arrangement (APA).

Where successful it took, on average, over two months for this to be organised, on top of the two months arrears already accrued – this has caused arrears to build up substantially.

Those landlords that have to wait for two months arrears before they can apply for direct payment are reporting that on average the APA process takes 9.3 weeks.

This, when added to the initial two months arrears accrued, means that landlords are on average owed 4 months’ rent before they are successfully awarded direct payment.

The RLA is calling for the APA process to be improved as a matter of urgency, particularly before managed migration begins next year and more families and complex cases are moved onto UC.

One fifth of landlords also reported that their mortgage lender prevented them from renting homes to tenants in receipt of benefits.

The RLA is calling for tenants to be able to choose, where it is best for them, to have the housing element of UC paid directly to the landlord.

It is calling also for private landlords to be given more information about a tenant’s claim, such as when they receive payments, where this is in the best interest of the tenant to sustain the tenancy so that suitable rent payment schedules can be arranged.

As reported by 24housing, UC is already due an Opposition Day debate in the commons next Wednesday (Oct 17).

Former housing minister Alok Sharma also faces a grilling from the Commons work and pensions committee over government’s preparations for the mass migration of claimants.

 

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