Landlords welcome planned changes to Universal Credit

22 Jan 2019 12:51 PM

RESPONDING to reports that the Work and Pensions Secretary will today announce reforms to Universal Credit including a new online system for private landlords to get rents paid directly to them, Chris Town, Vice Chair of the Residential Landlords Association said:

“Our most recent research has shown that 61 per cent of landlords with tenants on Universal Credit have seen them go into rent arrears, up from 27 per cent in 2016. 

“Improving, and speeding up, the process by which payments can be made directly to the landlord has been a central part of the RLA’s campaign on Universal Credit. Anything that helps this will give landlords much greater confidence in the system and ensure tenants have greater security in the knowledge that their rent payments will be met.”

With reports also that Amber Rudd will announce that the current benefit freeze will not continue beyond next year, Chris Town said:

“Independent research commissioned by the RLA has recently warned that the freeze in housing benefit rates has been a key driver of homelessness from the private rented sector.

“Unfreezing them will enable benefits to keep up with the reality of market rents.”

Notes:

• The research findings are based on an RLA survey conducted last year to which 2,234 landlords responded. The full report can be accessed at: https://research.rla.org.uk/wp-content/uploads/investigating-effect-welfare-reform-private-renting.pdf. It found that:
  • f those landlords with tenants on Universal Credit, 61% experienced them going into rent arrears in the past 12 months. This is up from 38% last year and 27% in 2016.
  • The average amount owed by Universal Credit tenants in rent arrears has increased by 49% in comparison to the previous 12 months. It has increased from £1,600.88 in 2017 to £2,390.19.
  • 53% of landlords with Universal Credit tenants reported that they had requested an Alternative Payment Arrangement (APA) and of these, 57% reported that it had been successful. Furthermore, 53% of landlords reported that they had included a claim for the repayment of rent arrears in the APA. Respondents were then asked how easy they had found the APA application process, 51% of landlords reported they had found it difficult or very difficult. Respondents were asked how long on average it took them to have the APA arranged. On average, landlords reported that it took 9.3 weeks for direct payment under the APA to be arranged, with the maximum reported to be a full year.
  • 22% of landlords reported that their mortgage lender prevented them from renting homes to tenants in receipt of benefits.
• Research was commissioned by the RLA and undertaken by academics from the Policy Evaluation and Research Unit at Manchester Metropolitan University last year noted that: “It is the introduction in 2008 of the Local Housing Allowance (LHA) as a means of calculating Housing Benefit payments, and subsequent changes to LHA rates, that is driving the increase in homelessness from the private rented sector.” The report can be accessed at: https://research.rla.org.uk/wp-content/uploads/MMU-homelessness-and-the-private-rented-sector.pdf
• The Residential Landlords Association: The home for landlords
  • The RLA represents the interests of landlords in the private rented sector across England and Wales. We’re home to over 50,000 landlords nationwide, with a combined portfolio of over a quarter of a million properties. A growing community of landlords who trust and rely on us to deliver day-to-day support, expert advice, government campaigning, plus a range of high-quality services relevant to their needs. 
• Further information about the RLA can be found at http://www.rla.org.uk/aboutus or by following it on twitter @RLA_News.
• For further information please contact Ed Jacobs on 0113 278 0211 (office), 0770638677 (mobile), or by emailing ed.jacobs@publicaffairsco.com