Good news for landlords as government pledges to address Universal Credit concerns
The difficulties faced by landlords who house Universal Credit tenants will be addressed by the Department for Work and Pensions after a new minister met with the Residential Landlords Association (RLA), the landlord organisation has said.
Caroline Dinenage MP, responsible for housing cost support at the Department for Work and Pensions, met with RLA directors David Smith and Chris Town to discuss issues including rent arrears and direct payments.
The RLA raised concerns about tenants on Universal Credit who build arrears then move out of a property, and emphasized the inability of landlords to claim their money back.
Research by the RLA last year found that 25 per cent of landlords with tenants on Universal Credit said that they had tenants in rent arrears, while a survey suggests that 68 per cent of private sector landlords are now less likely to rent to tenants on benefits.
Speaking at a Simple Landlords Insurance event, Birmingham landlord Sue Sims explained: “You need the security that you’re going to get your rent paid on time, otherwise you can’t pay your mortgage. As a result, I won’t even consider housing benefit tenants in my properties any longer.
“If a lot of landlords across the board are going to exit the private rented sector, it's going to hit social housing really hard. These are the people that need all the support they can get, and they're just not going to get it from the private rented sector. I don't know where they are going to go.”
The Minister and officials have agreed to look closely at the RLA’s key concerns and said there are new plans to improve the information on the DWP website for landlords applying for Alternative Payment Arrangements to help tackle some of the concerns landlords have raised over direct payments.
It was re-stated that a claimant and a landlord have the ability to ask for direct payments where they feel there is a good case.
A new ‘Housing Confident’ scheme was also announced, which the DWP said will ensure Universal Credit work coaches talk to claimants specifically about housing – and are alert to the support claimants might need.
One of the aims of the initiative is to get claimants talking to their landlord – something the RLA has campaigned for – with the scheme to be piloted in four areas.
In March, RLA chairman Alan Wall said: "The result of landlords not having confidence that they will receive the rent is that fewer will be willing to rent property to those in receipt of benefits.
"They can’t afford to take the risk of being out of pocket."
He said problems have been sparked because the opportunity to make direct payment to the landlord has been reduced and the benefit is paid monthly in arrears, with first payments not received until six weeks after the claim has first been registered.