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On Monday 12th November, BBCs latest Panorama investigation focused on the impact of the controversial Universal Credit, and most crucially the housing element.The programme revealed the extent of the rent arrears problem as a result of changes to the benefits system.Paul Shamplina, founder of Landlord Action, together with Mick Roberts, one of the UK’s largest Housing Benefit landlords, join other industry experts in calling on the government to act now and scrap direct payments to tenants of the housing element of Universal Credit, before the situation worsens.Under the old system, housing allowance was paid direct to councils or private landlords.Now, in order to mirror the world of work and encourage people to be more independent, Universal Credit (UC) payments are made direct to claimants.However, when combined with the cuts in benefits, tenants are under increasing financial pressure, evidenced by the 55% rise in evictions of council tenants compared to the same time last year.Panorama revealed the average rent arrears for UC claimants across the UK stands at £663 versus £263 on the old system, nearly two and half times more*.According to Paul Shamplina, founder of Landlord Action, the changes are exacerbating the housing shortage by forcing private landlords to move away from letting to tenants in receipt of Universal Credit. In the last year, 61% of private landlords with tenants on UC have seen them go into arrears**.“It’s a deal breaker for landlords and yet the councils don’t have enough houses to house homeless people” says Paul. “We saw on Panorama that, in the last year, Flintshire Council alone has seen an 85% reduction in the number of private landlords on their books willing to rent to UC tenants. When you roll that out across the rest of the country you can see why we have such a desperate housing shortage. The system used to benefit tenants, by providing more accommodation, as well as landlords, who were guaranteed timely rent with no void periods. Now it benefits no-one. The most vulnerable tenants are being left behind, forced to use an online system which many can’t access, and landlords are having to start eviction proceedings as a last resort.”Mick Roberts, 40, has been a private landlord for more than 20 years. He has always let his properties to Housing Benefit tenants but is now having to consider only letting to private tenants. He comments:“I have loved letting to housing benefit tenants over the years and formed great relationships with many of my tenants, but I’m sad to say I can no longer do it as a direct result of Universal Credit. As an example, I have four tenants in Nottingham in receipt of housing benefit who have rented from me for over 16 years. They have NEVER had arrears. They have all been moved to Universal Credit, and now they are all in arrears! That’s 100% failure rate. I believe sorting the housing element would solve a large proportion of problems.”Panorama’s investigation appeared to echo what many industry experts has been saying for some time - the majority of tenants do not want direct payments because they openly admit they struggle to budget.Alok Sharma MP, Minister of State for Employment, argued that UC is working well, that there have been lessons learnt in the process but that “we have is a simpler system which people understand and ultimately makes sure they get into work fast, stay in work longer and earn more.”Mick Roberts vehemently disagrees with this: “UC has to be applied for online. I have a tenant who doesn’t even know how to go online or have access. They are not coming out to see the people at ground level. If they spoke to the tenants that are affected by this, as I have, they would realise.”Paul Shamplina adds: “I’ve raised my concerns over the increasing complexity of the scheme which, in many cases, means even staff assessing Universal Credit claims are making mistakes on an all too regular basis to the detriment of tenants and landlords.Over the next few years, thousands more families will move across to UC as the Full Service rollout expands, bringing with it even more complicated cases and further challenges for DWP staff. Unless changes are made now, housing stock will decrease further, and homelessness will increase. At present, direct payments to landlords are only considered in certain crisis situations. This needs to change and tenants and landlords need the option to have the housing element paid direct to the landlord.”*(Source: FOI Freedom of Information: 129 out of 195 councils with housing stock, September 2018).
** Residential Landlords Association, October 2018SEE ALSO - APA losses caused by DWP maladministrationUP NEXT - Universal Credit-A TOTAL DISGRACEDON'T MISS - THREE out of FOUR tenants on UC in arrearsNOW WATCH:
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
It's so SO SO simple to solve.
Pay the Landlord direct.
What's the WORST THAT CAN HAPPEN IF U PAY THE LANDLORD DIRECT the money that's supposed to be for rent anyway? Oh yes, rent gets paid, tenant keeps home.
But no, this Govt knows best. They love bashing Landlords, but they seem to be missing a VERY important point. They bash the Landlord, they also bash the tenant. We rely on each other. We work with each other. The mortgage lender is at top of tree and Landlord and tenant are dictated by mortgage lender. Mortgage don't get paid, tenant and landlord both lose. Are the Govt that thick to not know that?
Agreed Mick - sole caveat being that Kent Reliance B Soc survey says only 1/3rd of PRS units are mortgaged
Alok Sharma`s body language didnt match up to what he was saying
His words said UC was working well .
His body language however said UC was not working well
He was telling porkies - and he knew it of course
My tenant was on LHA paid direct to me . That worked well for both of us
No problems. Nice, polite, unassuming tenant . But they were also a recovering alcoholic
£650 direct to me each month and everything was hunky dory - then UC came along
No one bothered to tell me . It was all done behind my back
Even though its my house, my AST my livelihood - Surely i was a key interested party
But no I was shunned - i was totally ignored in the process
Spot went went wrong
Jan LHA 650 straight to my bank account
Feb LHA 650 straight to my bank account
March LHA 650 straight to my bank account
April LHA 650 straight to my bank account
May LHA 650 straight to my bank account
June LHA 650 straight to my bank account
July UC 650 went on drink and drugs and parties
Aug UC 650 went on drink and drugs and parties
Sept UC 650 went on drink and drugs and parties
MR Sharma . UC didnt work in this case did it .
No you gave a recovering alcoholic money . The temptation was to great for them
In an ideal world everyone would follow your text book
But its not an ideal world and anyone with common sense knows that
There are unfortunately many many dysfunctional people.
Its not their fault they are dysfunctional they just are
But you cruelly and sadistically set them up to fail
I see it time and time again
You dictate to them that the rent must go to them
To prepare them for the workplace and so they can learn to handle their finances and empower them
But mine want the power to say .....
Hang on No I dont trust myself so please pay my landlord direct
But you dont allow them to have their wish - so you in fact dis empower them
You dictate to them what they should do with `their` money . You don`t give them a choice
If you are so keen about empowering people, then when i had a job surely you should have paid me all my wages gross and then allowed me to keep some aside and pay HMRC some tax every month. You surely want to teach me to be responsible and set money aside each month to pay water electric gas and tax . Ah but wait - you are happy for me to budget to pay water electric and gas on my own but funnily enough not my tax .
No you deduct it at source before i get my hands on it . And that`s because you simply dont trust me to pay it to you . And I understand that .
But you really cant have it both ways Mr Sharma
UC is a total disgrace
Jonathan Clarke. http://www.buytoletmk.com
Far too big and simplistic attempt at social engineering to get the jobless used to managing their benefit monies in same way they would need to manage monthly wages whilst in work.
All whilst ignoring the obvious - that the poorer 1/3rd of society are in rentals - and they are poor as they are for various reasons less capable than many of their peers - and inability to be good money managers is just one symptom.
My heart went out to the 2 older guys on Panorama who were totally let down by the system.
It would be nice if tenants had the choice:
UC explained to them thoroughly, and what they would have to do IF they went on to UC.
"Your home may be at risk if you don't keep up payments" is a phrase used elsewhere, but is equally valid for UC claimants.
Given the choice, I'm sure JC's tenant would have thought it could all go wrong quickly and stick with the current direct to LL arrangement, but unfortunately they weren't given the choice to refuse and stick with what they were on?
UC has been promoted heavily as saving the tax-payer money. Well on paper, UC *might* save the tax-payer money, but not when you look at the other off-paper expenses it causes such as TA, LL losses etc. etc.
Another Con pipe-dream that is doomed to failure. Spend £billions to save (a few) £millions. And shaft a lot of people along the way.
Only convincing argument in favour of UC is that it is supposed to roll up core benefit entitlement via a "one stop shop" and not make people apply separately for several different benefits - and if it was paid in a timely manner it might just work - but sadly any dealings with public sector bodies proceed at a snail's pace if at all!
Brilliant Jonathan. That Alok Sharma Delusional MP said I know it's working well cause I've asked the job centre and the staff said it's working well.Is he dumb? They gonna tell him what he wants to hear.He hasn't even asked the tenants on the ground that's going skint, hungry, homeless etc. what's really happening.Ha ha yes, he telling Porkies.That's exactly it, it's done behind our back & we're last to know. What is the Job Centre thinking-On that subject, I hijacked one of my tenants meeting with Job Centre & they was fuming but after 10 mins said 'We're really sorry Mick, We've only had a weeks training'. I said u playing with peoples homes here, play safe RING RING RING me.
Your monthly figures explain it perfectly. We know the answers and we aren't in paid Govt to give the answers. How can these MP's get it so wrong.It's not an ideal world and we know a lot of HB UC tenants need a touch of help budgeting. They aren't all like Eton Tory toff MP's who get taught finance skills by Grandma dishing the money out.
Paying them direct rent makes them less prepared for the workplace as they in a mess before they start.
And bang on with the HMRC.Apparently UC is costing 3 times as much per claim now than the old system.
UC will be costing more - as core design is to rake in several benefits under one basic claim.
Anyone taking a job with DWP/Job Centre will likely to be set targets to sanction people - failing which their own jobs are at risk.
Plus the whole ethos of such public sector departments is totally lacking in any commercial expediency.
- Not universal (many benefits excluded...., many groups of claimants excluded..)
- No credit to anyone especially the architect/sponsor, Iain Duncan Smith.
This government hasn't a clue how to manage anything, possibly not even a whelk stall: (e.g three simple examples, UC, Br*x*t, FoBTs...)
The problem is deeper than paying the HB element of UC direct to the LL. Because of the Cap & the HB element being last on the list there is not enough money to pay the rent. E.G When UC was 1st bandied about LA gave out leaflets to T explaining how it worked & if their HB element worked out less than their rent they should speak to the LL & ask for a reduction - As a result of this one T of mine had £50 HB to pay £600 rent - he asked me for a reduction as advised by the LA !!!!
Call me Stupid but I would have thought that having a roof over your kids head was 1st on the list so that the cap reduced other benefits & meant that the HB element was enough to pay the Rent - Direct to LL of course !!
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