The Government is to start working on an online system that will let private landlords access rents directly from tenants on Universal Credit.
The move seems designed to help Universal Credit claimants, but also to encourage private landlords to accept housing benefit tenants.
Currently, it is widely reported that letting agents and private landlords turn away these tenants because Universal Credit pays the rent money to the tenants as part of an overall package of benefits – but with no guarantee that the money will actually be passed on to the landlord.
Work and Pensions Secretary Amber Rudd revealed at the weekend that a new system will be developed to give landlords certainty that those on housing benefit will pay their rent.
She said: “One third of Universal Credit claimants in social rented housing have their rent paid directly to their landlord. But in the private sector, that number is only 5%.
“People in the private rented sector already face a far higher risk of losing their tenancy, and I know from talking to claimants and landlords that the current system isn’t working for some of them.
“So we need to make it easier for tenants in the private sector to find and keep a good home, by giving landlords greater certainty that their rent will be paid.
“Therefore, I have asked the department to build an online system for private landlords, so they can request, where necessary, for their tenant’s rent to be paid directly to them.
“And I will consider what else we can do, because I am determined to help keep people in their homes.”
However, there is no indication of when this system will be introduced.
The Government’s announcement followed victory at the High Court for four working mothers in receipt of Universal Credit. They successfully argued that the system was unfair, plunging them into debts including rent arrears, because of the way the system now operates.
They said they had been paid differing amounts, at differing times, making it impossible for them to budget.
They successfully claimed that the Government had wrongly interpreted the regulations.
Commenting on the government announcement, Chris Town, vice-chair of the Residential Landlords Association, said: “Our most recent research has shown that 61% of landlords with tenants on Universal Credit have seen them go into rent arrears, up from 27% 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.”