Residential Landlords Association (RLA)
Today in politics: Research and Universal Credit
We look at new research demonstrating the ways landlords are contributing to local economies and discuss all the latest news on Universal Credit.
Local economy reliant on landlords
New buy to let research, surveying 1,000 UK-based landlords, highlights the important contribution they make to their local economy, with eight in ten (81%) turning to a local tradesperson when their property requires work or renovation.
Landlords spent on average £1,443 in the last 12 months on services such as plumbers, builders, letting agents and other tradespeople hired from the local community.
Of the total amount paid to local service providers, landlords spent the most on letting agents, a total of £879m in the past twelve months, followed by £442m on general handy-workers and £396m on plumbers. Also, landlords spent £375.4m on electricians, £377.3m on builders, and £243.2m on cleaners.
Over a third (39%) say trust is the main reason they turn to someone local, while a quarter (26%) say that, as they don’t live close to their rental property, having local people do maintenance is reassuring to them.
Furthermore, one in three (31%) want to support their local economy by using local tradespeople and one in four (24%) say they tend to be cheaper to alternatives which helps keep their business costs down.
The report, by Aldermore Bank, found that landlords are happy with the services local tradespeople provide and two thirds (65%) will continue to use them, with a further quarter (25%) intending to use them even more in the future.
CMP regulations tabled by government
The Government has laid before Parliament the Draft Client Money Protection Schemes for Property Agents (Approval and Designation of Schemes) (Amendment) Regulations 2020 (by Act), with an Explanatory Memorandum.
The regulations have been laid under the affirmative resolution procedure. This means they must be actively approved by both Houses of Parliament before coming into law – although this will be a formality.
Universal Credit roll out delayed until 2024
The BBC is reporting that the full rollout of Universal Credit is being delayed again.
Officials have told said not enough people are moving to the benefit as they are ‘scared’.
The backroom discussions leading to the latest delay were recorded by a BBC team whose series, Universal Credit: Inside the Welfare State, starts this evening.
The programme films Neil Couling, the senior civil servant in charge of the rollout for the past five years, as saying: “We’ve got a lot of anecdotal evidence of people being scared to come to Universal Credit.
“It’s a potentially serious issue for us, in terms of completing the project by December 2023, but I’m urging people not to panic.”
It goes on to say that a few weeks after he said the above, Mr Couling then concluded that delaying the full roll out of UC to September 2024 was needed. He is quoted as saying: “Three, six or nine months, it doesn’t matter – the headline will be: ‘Delay, disaster’.
“I would say, ‘Go safe, put the claimants first, and I’ll take the beating.’”
The programme will be broadcast at 9pm this evening on BBC Two.
In August, new research on Universal Credit for the RLA was published. You can read the report here.
Want to learn more about Universal Credit? The RLA run training courses for landlords and letting agents on Universal Credit, delivered by LHA and Universal Credit expert Bill Irvine.
Government to examine the way Universal Credit payments are calculated
Darren Jones MP (Labour, Bristol North West) has received a response to his written question asking if the DWP will bring forward legislative proposals to reform the calculation of monthly equivalents for Universal Credit claimants with weekly rent liabilities.
He wants it to multiply the weekly rent by:
(a) number of rent weeks in the year, and dividing that figure by 12 or
(b) average number of weeks in a year.
The Work and Pensions Minister, Will Quince MP, said: “Neither tenants nor landlords lose a week’s rent in a 53 weekly rent payment year as has been alleged; no year contains 53 weeks.
“The problem is alignment between weekly and monthly cycles.
“Each month the UC housing element is a constant figure but claimants with weekly tenancy agreements will be required to make either four or five rent payments within this period.
“When rent is always paid on time, in five payment months they are effectively making payment for part of the following month.
“That month will always be a four rent payment month, so the combination of the advance payment and the ‘overpayment’ of housing support during that month will result in the correct amount of housing element being paid.
“Where a landlord charges rent weekly on a Monday, because of the way the calendar falls every five or six years, they will seek 53 rent payments in a year, with the 53rd payment in part covering the tenancy for the first few days of the following year.”
“There is a separate issue with respect to the way the calculation in the Universal Credit regulations converts a weekly liability into a monthly allowance.
The conversion is achieved by multiplying the weekly rent by 52 and then dividing by 12. This effectively means one day’s rent a year (two days in a leap years) are not covered by UC.
We are currently considering whether this formulation around weekly rents, and potentially other weekly amounts in the UC calculation, should be amended.”
The Minister has also responded to written questions tabled by Neil Gray MP (SNP, Airdrie and Shotts) who has asked what assessment the DWP has made of the effect of the five-week wait for a first payment of universal credit on levels of:
(a) homelessness and
The Minister noted:
“Alternative Payment Arrangements (APAs), such as a managed payment to landlord (MPTL), are available to enable the housing costs element to be paid directly to the landlord if the tenant is likely to have difficulty in managing their rent payments or is in rent arrears.
“APAs will only be considered where a lack of financial capability poses a risk to the claimant, or their family, and the decision to implement one is assessed on a case by case basis.
“Our own analysis shows that Universal Credit in fact reduces rent arrears, supporting research carried out by the National Federation of ALMOs which shows over three quarters of their tenants come onto Universal Credit with pre-existing rent arrears.
“It also shows that arrears tend to increase prior to making a claim for Universal Credit, and that Universal Credit actually appears to be helping to clear arrears over time.
“We are currently extending this analysis to include a number of housing providers. It will be published when completed.”
Shelter report on temporary accommodation
Shelter has published a new report on temporary accommodation.
It says most of the highest earning private providers of such accommodation “do not own their own accommodation, but instead act as brokers between councils and private investors. It appears that their profits come from the margin between the guaranteed rents to investors and the nightly rates they charge local councils.”
“This suggests councils may have been unable to secure renewals of private sector leases directly from the owners of the accommodation because brokers have moved into this space, enticing landlords with guaranteed rents and added incentives.
“We discovered several providers offering advice to landlords on how to convert their properties into houses in multiple occupation (HMOs) to maximise revenue.”
DWP publishes latest Universal Credit newsletter for landlords
The Department for Work and Pensions has published a new newsletter for landlords with the latest updates on Universal Credit. It can be read in full here.
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