Over half of landlords letting to Universal Credit tenants experiencing arrears

Universal Credit is causing tenants to fall behind with their rent, according to new research for the Residential Landlords Association.

It reports that 54% of private landlords who have let to tenants on Universal Credit in the past 12 months have seen them fall into rent arrears.

Of these, 82% said that the arrears only began after a new claim for Universal Credit or after a tenant had been moved from housing benefit.

Almost seven in ten (68%) landlords said that there was a shortfall between the cost of rent and the amount paid in Universal Credit.

Private landlords renting to Universal Credit claimants can apply to have the housing element paid directly to themselves when a tenant has reached two months of rent arrears.

This is known as an Alternative Payment Arrangement (APA).

The RLA’s research shows that it took landlords an average of almost 8.5 weeks for an APA to be arranged – meaning that landlords can be left with almost four months of rent arrears before they begin to receive the rent they are owed.

The research further found that 36% of landlords said that they had buy-to-let mortgage conditions which prevent them from renting to benefit claimants.

The RLA is calling on the Government to do more to prevent rent arrears occurring in the first place, including:

  • Giving all tenants from the start of a claim for Universal Credit the ability to choose to have the housing element paid directly to their landlord.
  • Ending the five week waiting period to receive the first Universal Credit payment.
  • Ending the Local Housing Allowance freeze to ensure it reflects the realities of private sector rents.

David Smith, policy director for the RLA, said: “Today’s research shows the stark challenges the Government still has in ensuring Universal Credit works for tenants and landlords.

“The system only provides extra support once tenants are in rent arrears. Instead, more should be done to prevent tenants falling behind with their rent in the first place.

“Only then will landlords have the confidence that they need that tenants being on Universal Credit does not pose a financial risk that they are unable to shoulder.

“Without such changes, benefit claimants will struggle to find the homes to rent they need.”

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9 Comments

  1. DASH94

    I’ve had delayed payment for most if not all of our tenants that rely on UC – but in every case, they’ve caught up within 2 or 3 weeks and thereafter everything’s been fine. In my opinion the risk is increased if the household relies entirely on UC and other benefits.  Where at least one individual is in some sort of work, they manage the shortfall better.

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  2. Gromit

    This article is obviously all lies – because “Shelter” (the faux charity that houses no-one) in their latest video says DSS tenants are not riskier than any other tenant. – NOT!!

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    1. Orson67

      REALLY, Shelter have obviously never dealt with DSS Tenants, have they.

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      1. Gromit

        Shelter know all too well what the situation is. Why else would they refuse to back up their claims by bonding DSS tenants? – they are not that stupid.

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  3. RosBeck73

    There is also evidence that the DWP will promise to pay the landlord the rent direct after the tenants is 2 months in arrears but then go ahead and pay the tenant again, despite all warnings from the landlord that the payment will not be passed on by the tenant. There is then no system for compensation for the landlord for the DWP’s mistakes. There is therefore no incentive for DWP staff to get it right. They still get their salary at the end of the month, and the tenant has extra pocket money for whatever they choose. Only the landlord loses out.

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    1. CountryLass

      And last I checked, if an overpayment had been made, it was clawed back from whoever the money was named as being paid to, so if the tenant (accidentally or otherwise) claimed too much but the money went to the Landlord, then the Landlord had to pay it back even though s/he had not had anything to do with the application!

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  4. HIT MAN

    CountryLass, thats not the case if you can prove that the tenant is at fault then any overpayment is the tenants liability and is usually deducted by instalments from any future payments, the best way forward is not to accepts UC applicants unless they have homeowner guarantors, this has been our policy for years.

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    1. CountryLass

      I’m lucky that I don’t get too many UC applicants, although I have noticed an increase in people applying with CCJ’s…

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    2. Peter Green

      Agreed. We have had LA’s trying to “clawback” so called overpayments made to us on behalf of tenants. When we’ve stated that we (genuinely) did not have any knowledge of “benefit breaches” by the tenant, the LA has always backed down. I think in general LA policy is to go after whoever they think will be able to pay. Similarly, to avoid the situation occurring in the first place, we now  usually insist that any benefits are paid directly to the tenants, not us.

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