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  • Property-a-holics

    Failure of UC will signal the demise of S24!



    I am increasingly hearing of landlords who are struggling to deal with rent arrears for tenants in receipt of Universal Credit.

    Many landlords built good relationships with local authorities over many years and liaised directly with them when in need of a direct payment.

    Now landlords and tenants have to deal with the Department of Work and Pensions (DWP) direct, it is like an ant trying to penetrate a brick wall.

    The communications are complex and ineffective.  They are mostly on-line, which some people may struggle with.

    Frank Field, the Labour chair of the work and pensions select committee, said recently that the complexity of the system was a “mega issue” and his committee would be investigating.

    I can only foresee that so many landlords will give up with UC and so many tenants will be made homeless by DWP processes, that a crisis point will be reached very quickly.

    When that happens, the Government will have to reverse Section 24 to encourage landlords back and deal with the crisis caused by the DWP and the roll-out of UC, which, in my opinion, is not fit for purpose.

    It would be deeply ironic if one Government policy forced the cancellation of another one, but what I suggest is not beyond the realms of possibility as the Government has not used any form of joined up thinking and has tweaked too many levers, often the wrong ones.

    I am only amazed that there is not more coverage of this in the media as both landlords and tenants are suffering a great deal from what I am hearing ...

    To me, it is a ticking time bomb, and one way to diffuse it might be to repeal Section 24.

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    "I am increasingly hearing of landlords who are struggling to deal with rent arrears for tenants in receipt of Universal Credit."
    LHA had the same issues.
    Tenants have be more than 8 weeks in arrears before local authority did anything.
    You can get paid direct with universal credit as you can with LHA.
    Plus they have extra protections in place for landlords to help clear that arrears too.

    "The communications are complex and ineffective."
    It is. DWP are working to develop a landlord portal to make this more easier.

    "can only foresee that so many landlords will give up with UC and so many tenants will be made homeless by DWP processes"
    Landlords already had given up on benefit claimants.
    So many have "NO DSS" right next to the "NO PETS" on there property listings.

    "I can only foresee that so many landlords will give up with UC and so many tenants will be made homeless by DWP processes, that a crisis point will be reached very quickly."
    It will be interesting to see but i am doubtful.
    Landlords would rather than UC Tenants with the DWP issues, rather than a vacant property paying nothing & 200% council tax.

    "The Government will have to reverse Section 24"
    Its nice to have dreams..

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    The above post is not financial advice, its often me rambling - passing time on a coffee break.
    If you are looking for the Best BTL Mortgage? Call the Specialist Team at Bespoke Finance.


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    Can you clarify "You can get paid direct with universal credit as you can with LHA"

    With the LHA system - I could make a request at the HB application stage that direct payment "would assist the tenant in securing the tenancy" and the council had discretion to may the payment after amendment HBR 96(3)(b)(iv) issued in April 2011. The tenant all signed this request and also indicated the same on the HB application form. 

    It is a discretionary payment but my own council was OK with it

    Are you saying something similar exists with UC?

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    A landlord can only request direct payment if Tenant is in arrears but if the tenant has arrears or find it hard to budget.
    to "secure the tenancy" not as far as I am aware Raj.

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    _________________________________________________________________________


    The above post is not financial advice, its often me rambling - passing time on a coffee break.
    If you are looking for the Best BTL Mortgage? Call the Specialist Team at Bespoke Finance.


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    They do indeed have the power to pay direct to ‘secure or sustain’ a new or existing tenancy.

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    Adam - That tenant having to be in arrears for direct LHA went out way back in 2011 as Raj says -

    All mine have been paid direct since then in order to secure the tenancy

    Its on my AST and there is a specific form to fill out . I get it direct from Day 1

    Its a regulation not law and some councils vary in their implementation of it

    They need to be challenged if they dont pay direct .

    With UC its called APA - Alternative payment arrangements

    We are not on UC in my area yet so I`m not up to speed - but this helps explain

    https://www.housing.org.uk/topics/welfar...angements/

    My understanding is though that if you were on direct LHA you should transition to APA

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    Jonathan Clarke. http://www.buytoletmk.com


    I had a conversation with a Lady for the house of Lords who is a Tory

    and she said the Govt is not in listening mode

    The EU caper is taking all their time and they don't have time for other things

    S24 was dreamed up at a very different time when the EU thing was never dreamed of

    S24 will not change How Can It

    I know it will cause great harm in the long run

    My own feeling is the Govt may bring in some sort of sweetener

    ie offer a five year tenancy and you can have Tax Relief on your Mortgage and possible rent caps

    If they did go down this line They could be seen as gaining something which help GR

    S24 could become a bargaining tool

    There has to be a middle ground for all of us Govt & Landlords.

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    Learn Change and Adapt ?????


    There are rumours that the Government will be introducing a reduction in S24 for landlords who agree to offer longer tenancies. Wink

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    hi Vanessa, I would like to offer longer tenancies but my lenders (mostly) stipulate in the mortgage Ts & Cs that I must let on an AST. So longer tenancies offered by non-mortgaged LLs only??? who would unlikely be affected by S.24

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    I understand that the Government is aware of this and that the lenders are being consulted Denise.

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    That's good news. I do have one mortgage that makes no mention of AST or length of tenancy and I have had the same tenant there for more than 5 years so far....

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