MPs to debate impact of Universal Credit on private rental sector

MPs today discuss the impact of Universal Credit on the private rented sector, in a debate prompted by the Liberal Democrat’s Work and Pensions spokesperson, Stephen Lloyd.

To mark the debate the Residential Landlords Association has released research finding that 73 per cent of landlords still lack confidence in renting to tenants on the Credit due to uncertainty that they will be able to recover rent arrears.

In one example cited by the RLA, Brandon Taylor from Lowestoft provides homes to rent to around 130 Universal Credit claimants, of which 70 per cent are struggling to pay their rent in full and on time.  

In one extreme case, a tenant who was on Universal Credit accrued £2,848 in rent arrears. Where tenants accrue two months or more of rent arrears, landlords can apply for payments to be made directly to them, known as Alternative Payment Arrangements. 

When he has applied for this, Taylor has found requests to the Department for Work and Pensions have been ignored; he says landlord confidence in Universal Credit has been damaged and that it will take years to regain that confidence back.

Linda Hazelwood, a landlord in the West Midlands, has told the RLA of a tenant in receipt of Universal Credit who she rents to in Halesowen. The tenant is a young single mother who has just had another baby. Having been a tenant for at least five years, she now owes her landlord over £1000 in rent. Hazelwood says that the tenant does not want to be in arrears, but cannot afford to pay the rent on time. 

Another tenant of Hazelwood’s in receipt of the Credit has accrued £900 of arrears. Expressing her frustrations about the system, she has warned that it is not doing enough to support those tenants, especially the vulnerable, who do not have access to computers in order to process and manage Universal Credit payments.

The RLA is making a number of proposals which would improve the delivery of Universal Credit for both tenants and landlords.

These include ensuring private landlords are routinely informed when a tenant moves from the older benefit system to Universal Credit to help them to establish suitable rent payment schedules with tenants.

It says mechanisms need to be put in place to give landlords confidence that rent arrears can be reclaimed after a Universal Credit tenant leaves a property, and that tenants should also be given the option to choose to have the housing element of Universal Credit paid directly to the landlord, if they wish.