Sunday, February 25, 2024

Rise in rent arrears involving tenants on Universal Credit

Rent arrears involving tenants on Universal Credit have surged, finds survey

Nearly two-thirds of private landlords with tenants receiving Universal Credit have experienced them going into rent arrears, a survey has found.

Some 61% of landlords with tenants on Universal Credit have experienced them going into rent arrears in the past 12 months, according to the findings from the Residential Landlords Association (RLA)’s research organisation, Pearl.

This is up from 38% last year and 27% in 2016, when previous research was carried out.

On average, Universal Credit tenants in rent arrears owed nearly £2,400.

Universal Credit is replacing six other benefits, including housing benefit and income support.

Over half (53%) of landlords with tenants on Universal Credit applied for direct payments to be made to them instead of to the tenant, known as an alternative payment arrangement (APA).

The RLA is calling for the APA process to be improved “as a matter of urgency” particularly before more families and complex cases are moved onto Universal Credit.

It says tenants should be able to choose, where it is best for them, to have the housing element of Universal Credit paid directly to the landlord.

It is also calling for private landlords to be given more information about a tenant’s claim, such as when they receive payments, so that suitable rent payment schedules can be arranged.

At present, this is provided to social sector landlords, but not to those in the private sector, the RLA said.

It also said formal mechanisms should be put in place to enable landlords to reclaim rent arrears where tenants on Universal Credit leave a property owing rent.

RLA policy director David Smith said their research shows clearly that further changes are urgently needed to Universal Credit. He said the RLA welcomed its constructive engagement with the Government over these issues but more work is needed to give landlords the confidence they need to rent to those on Universal Credit.

More than 2,200 landlords were surveyed.

A Department for Work and Pensions (DWP) spokeswoman said Universal Credit (UC) is a flexible benefit that gives claimants more control over their working lives and their finances.

The spokeswoman said they have already made significant improvements to UC including providing two weeks’ extra housing support for people moving onto UC from housing benefit, as well as removing the seven waiting days and making 100% advances available. And as the RLA recognises, the impact of these changes is still to be felt.

Direct payments are not new to UC and housing benefit has been paid directly to claimants in the private rented sector since 2008. She said, with UC, housing costs can be paid directly to landlords if requested and they have already made a number of changes to improve this process.

She said they are working closely with the RLA, considering their research carefully, and further improvements are planned to make alternative payment arrangements to landlords easier, faster and more secure.

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