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Landlords call for fairer approach to Welfare Reform

Wednesday 31 May 2017

The Residential Landlord Association (RLA) is calling for 'a fairer approach' to Welfare Reform for landlords and tenants, by giving Universal Credit (UC) claimants the choice of having their rent paid straight to their landlord and speeding up the claim process. 

Nearly a quarter of private sector tenants now receive housing benefit, according to the most recent English Housing Survey, with numbers set to grow as more and more local authorities look to the sector to house the homeless and other vulnerable tenants.

Senior policy officer for the RLA, Natalie Williamson, said the overall benefit cap, local housing allowance (LHA) rates reduced to the 30th percentile, the roll out of UC and the length of time it takes to process an application, as well as direct payment of benefits to tenants, were all affecting landlords and tenants. 

The extension of the Shared Accommodation Rate (SAR) from 18 to 25 to 18 – 35 years old and the removal of housing costs to 18 – 21 year olds had also had an impact, she said. 

"Now landlords are more frequently faced with existing and prospective tenants potentially unable to make up the shortfall of their rent because their LHA has been cut and their benefits have been capped," she said. 

"Or if they are renting to a single person under 35, they will now only get the rate equivalent to a single room in a house share and they too may be unable to find the surplus money needed to cover the rent of a one bedroom property."

Ms Williamson said UC, which aimed to teach benefits claimants how to manage their finances responsibly, had caused problems.

Research by the RLA into landlord’s experiences of letting to tenants on UC in 2016 found that 24 per cent of landlords with tenants on UC were in arrears.

As a result, a third of landlords said that they had requested that payment to cover rents be made directly to them - after a tenant gets into two months of rent arrears - but only 38 per cent had been successful in achieving this.

And 61 per cent of landlords found the process either 'tricky' or “very difficult'.

Research by Sheffield Hallam University found 68 per cent of private landlords are less likely to rent to those in receipt of benefit. 

Ms Williamson said: "We believe that tenants receiving Universal Credit should be allowed to choose, where they feel it is best for them, to have payments made directly to their landlord to provide assurances that the rent is paid. 

"This is a position shared with tenant groups, such as Shelter."

The RLA is also calling on the next Government to abolish the one week waiting period required before a tenant can apply for UC and to continue to work on making the whole system more efficient.

"We don’t want to see good landlords stop providing housing for those most in need and that is why we have included the impact of welfare reform in our six key asks," she added.

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