Landlords warn government over universal credit tenant arrears
Concerned landlords have issued a stark warning to the government as statistics show that two-thirds have seen tenants get into debt as a result of universal credit issues.
Research by the Residential Landlord Association (RLA) discovered that 61 per cent of the landlords questioned had tenants who were facing rent struggles while claiming universal credit. This compares with a figure of 38 per cent in 2017 and just 27 per cent the year before.
Rent arrears figures boom in 2018
The data revealed that universal credit claimants were in rent arrears to the tune of almost £2,400. This signals a rise of almost 50 per cent on figures for 2017 when the figure stood at around £1,600.
The concern from landlords, who may be renting out their properties themselves or through Bath letting agents such as https://www.pritchards-bath.co.uk, adds to the backlash being felt by the government over the welfare reform that creates a single payment from six different working-age benefits.
Differences within government
Prime Minister Theresa May vowed that claimants would not suffer financially as a result of universal credit; however, Work and Pensions Secretary Esther McVey has admitted that some people switching to the benefit may be worse off. Two former prime ministers have warned that this could result in problems similar to the poll tax riots when Margaret Thatcher was in power.
The RLA has called for an overhaul of the way in which the credit is paid, with the 50 per cent-plus of landlords who want payments to be made directly currently facing a wait of over two months.
More changes needed to universal credit
RLA policy director David Smith said the research clearly demonstrates a need for further changes to universal credit. He said that this was vital to persuade landlords that they could be confident in letting property to claimants. One of the major changes being called for is allowing tenants to opt to have payments made directly to landlords.
One-fifth of the landlords questioned also said that mortgage lenders stopped them from renting homes to benefit recipients, demonstrating a limitation on choice for both landlords and tenants alike.
Housing federations have also warned that almost three-quarters of universal credit tenants in social housing had amassed £24m in rental arrears, compared with under one-third of other tenants.