The £20 uplift given to Universal Credit (UC) claimants during the pandemic will be taken away today, a move that has been slated – not only by many MPs across all major parties, but the National Residential Landlords Association (NRLA) too.
The £20 top-up – which the chancellor said was only a temporary measure to help people through the pandemic – was extended by six months in March, but MPs across the political spectrum, along with charities and campaigners, have called for it to continue beyond the autumn.
With rent arrears at historically high levels, the NRLA also wants to see the top-up remain in place as it believes the cut will significantly worsen the levels of rent debt accrued by tenants across the private rented sector.
According to official government figures, almost 1.5m renters across England and Wales could also stand to lose £1,000 as a direct result of today’s announcement.
The NRLA points out that according to the 2019/20 English Housing Survey, 14.4% of privately rented households in receipt of benefits were behind on rental payments. Over the course of the pandemic, the overall proportion of privately renting households in arrears tripled. Many more households will be forced into a perilous financial position due to the impact of the end of the furlough scheme and today’s cut.
Without urgent reform of the Universal Credit system there is also a strong likelihood that tenants’ credit scores will be damaged – an outcome which will reduce their ability to access other housing in future, according to the NRLA.
The organisation wants practical steps to combat the negative effects of this cut, such as ending the five-week wait for a first payment of Universal Credit, which it says must also be prioritised by the government to bolster landlord confidence in the welfare system.
Responding to today’s changes, Meera Chindooroy, deputy policy director at the NRLA, said: “During the pandemic we have found that many renters have built high levels of arrears, which they will struggle to pay off in future. With this in mind, today’s cut to Universal Credit is a short-sighted move that will only serve to worsen this ongoing rent debt crisis.
“Most landlords have offered flexibility where tenants have faced the financial impact of the pandemic, but they cannot absorb these losses indefinitely.
“Practical steps to address this problem can and should be taken to ensure those tenants in receipt of benefits can cover their rents. It is our view that not only must the government end the five-week wait for the first payment of Universal Credit, it should also ensure they can choose to have the housing element of their Universal Credit payments sent directly to their landlord.
“Besides addressing the consequences of this cut to Universal Credit, it is our belief that adopting this new approach will go a long way towards the creation of a fairer, more inclusive private rented sector which works in the interests of both landlords and tenants.”