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  • LHA/Universal Credit

    Landlords experience of Universal Credit?

    Just been wondering what Landlords have been finding of Tenants on Universal Credit of late now that we're getting near to it being universal for all new claimants.

    I know from previous responses on here some Landlords have been totally put off taking on any Universal Credit Tenants. Is that still the case? or have any found its something they can work with once used to it?

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    My current lodger started with me on UC, after becoming both unemployed and homeless in quick succession. I've had lodgers for nearly 30 years and in this instance I went with my gut feeling rather than my head. (Its not the first time)

    My lodger had given immediate notice to the previous landlord on becoming unemployed with the intention of staying with friends. This wasn't a reliable plan with some periods being spent in a local homeless shelter. There was no reference available and very little in the way of funds. A lodger agreement was printed and handed in to the local authority in anticipation of housing benefit. This was no longer available and was referred to UC. Just over a month after the lodger agreement had started, I received the first rent payment on the day it was paid to my lodger.

    2 or 3 weeks later, my lodger started a full time job, paid monthly in arrears. I agreed that I would accept a partial payment, whatever UC paid, at the end of that month, with the remainder to be paid with the following month's rent out of the first full wages. UC made no payment as my lodger had commenced work before the payment was due.

    My lodger was already paying in arrears on an agreement that stated payment in advance. Lodgers have few rights, and in this case those few had been lost. The lodger agreement could have been ended with very short notice, which would have also resulted in the loss of employment. As it was, I stuck with my gut feel and the rent arrears were cleared within a few months with rent paid in full and on time since.

    My opinion of UC is that it is not suitable for those that most need it and that it can actually cause financial harm to those that rely on it.


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    Almost two-thirds of private landlords with tenants receiving Universal Credit have experienced them going into rent arrears according to new research.

    Based on responses from over 2,200 landlords, the Residential Landlord Association’s research exchange, PEARL, has found that 61 per cent of landlords with tenants on Universal Credit have experienced them going into rent arrears. This is up from 27 per cent in 2016.

    The research found that on average Universal Credit tenants in rent arrears owed almost £2,400, a 49 per cent increase compared to last year.

    Over half (53 per cent) of landlords with tenants on Universal Credit applied for direct payment to be made to them instead of to the tenant, known as an Alternative Payment Arrangement (APA). Where successful it took, on average, over 2 months for this to be organised, on top of the 2 months arrears already accrued. This has caused arrears to build up substantially.

    Those landlords that have to wait for 2 months arrears before they can apply for direct payment are reporting that on average the APA process takes 9.3 weeks. This when added to the initial 2 months arrears accrued means that landlords are on average owed 4 months’ rent before they are successfully awarded direct payment. The RLA is calling for the APA process to be improved as a matter of urgency, particularly before managed migration begins next year and more families and complex cases are moved onto Universal Credit.

    One fifth of landlords also reported that their mortgage lender prevented them from renting homes to tenants in receipt of benefits.

    The RLA is calling for tenants to be able to choose, where it is best for them, to have the housing element of Universal Credit paid directly to the landlord.

    It is calling also for private landlords to be given more information about a tenant’s claim, such as when they receive payments, where this is in the best interest of the tenant to sustain the tenancy so that suitable rent payment schedules can be arranged. At present, this is provided to social sector landlords, but not to those in the private sector.

    Formal mechanisms should also be put in place to enable landlords to reclaim rent arrears where UC tenants leave a property owing rent.

    RLA Policy Director, David Smith, commented:

    “Our research shows clearly that further changes are urgently needed to Universal Credit.

    “We welcome the constructive engagement we have had with the Government over these issues but more work is needed to give landlords the confidence they need to rent to those on Universal Credit.

    “The impact of the announcements from the Autumn budget last year remain to be seen. However, we feel a major start would be to give tenants the right to choose to have payments paid directly to their landlord. This would empower tenants to decide what is best for them rather than being told by the Government.”

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    Thanks Gary & Vanessa for your responses. I'm looking to get into Lodgings soon now that my house remodelling isn't far off complete. So your experience Gary was interesting to hear about. I too have chosen to go into Lodgings as apart from just having the one house as tends to be the case I wish to for go the whole Tenant quagmire. I can see how those with Lodgings could ease the UC situation by taking some of those that Assured Tenancy Landlords dare'nt touch.

    It was interesting to hear the state of the situation at present Vanessa. I'm guessing so far the Government think both Landlords & Tenants will have to get used to dealing with their lot under UC even if both take a financial hit. It should be interesting to hear of any alleviation in the budget in a couple of weeks or so. My guess any moderation will be greater if another General Election arises under a possible no deal/rejection of Chequers scenario.

    Myself in the area my house is located I should have a choice between Student Lodgers, Professionals or the UC crowd. I've got to say though that even with a better legal position I tend towards either Students or Professionals. I tend to like to steer clear of any potential for trouble. Though I kind of have some sympathy for UC claimants as many can be decent people I think but stuck among those that aren't or have problems. It's just not knowing which is which and although I could try going with my gut like Gary did I don't fancy the risk/potential for trouble a lot. I know some people of benefit conversely cam be real buggers and not the typd to make you're life an easy one and those are thd ones I would like to steer clear off. So for me I'm likely to play it safe with the Student or Professional lot who while I know could also be a bit of a pain I gamble on being less so on the whole I think. I'm guessing most Landlords then to plum for the Student or Professional crowd first and just go for the UC lot if they have no other option.

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    Stewie, don't take my example as good practice, it would generally be a terrible decision. I was having a rough ride with a non paying tenant in my rental property and when the room became available I made the decision to choose a person that needed it the most. I chose well on this occasion, but even with 30 years experience I probably couldn't do it again! I also wouldn't choose UC again, last time I took someone on benefits it was HB which was much simpler.

    If you are single, bear in mind that you will retain the single person discount on council tax if you take full time students as lodgers.

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    Thanks for the reply Gary, yeah I knew about retaining the single person discount if taking in students. I kind of have a preference for student lodgers as I guess I see them generally as more benign in that most will have a focus on staying on their course rather than playing games on rent (hopefully!).

    The only disadvantage I see is that they are likely to be more short term of one or two years generally, most probably one year. That and if one leaves their studies during the year getting another student replacement may be tricky. Working Professionals wouldn't have those problems though of course the hope would be for decent longer term Lodgers rather than those of less than a year. So it's kind of weighing up the two really.

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