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  • LHA/Universal Credit

    Universal Credit leading to rental 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 per cent of those 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 per cent said that the arrears only began after a new claim for Universal Credit or after a tenant had been moved to UC from housing benefit. 68 per cent of 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).

    With the research today showing that it took landlords an average of almost 8.5 weeks for an APA to be arranged it means that landlords can be left with almost four months of rent arrears before they begin to receive the rent they are owed.

    Among landlords with tenants in receipt of housing benefit, 62 per cent said that they were worried that their tenants might not be able to afford to pay their rent when they migrate to Universal Credit.

    The research further found that 36 per cent 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.

    According to the most recent statistics, 45 per cent of households receiving Universal Credit with support for housing costs are in the private rented sector.

    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 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.”

    Partner service:

    If you are struggling with any aspect of Universal Credit, such as APAs or rent arrears, contact UC expert Bill Irvine on 07733 080 389 or click on the banner at the top of this thread to find out more about the specialist services he offers in this niche area.

    SEE ALSO  -          Universal Credit-A TOTAL DISGRACE

    UP NEXT -              THREE out of FOUR tenants on UC in arrears

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    Yes it was inevitable unfortunately that this would happen because of the way it was set up

    It was  so obvious from the start where some of the flaws were in the transition structure

    So I believe it was a deliberate preconceived act  by the Gov

    There is no real appetite for them to correct it either

    So as a result I am not taking on any new LHA/UC tenants

    Only existing ones with a good track record will I consider or if I see a special exception

    I get bombarded with enquiries still so I know the situation is dire for the homeless

    Had one this morning . 5 years ago  i would have said yes . Today its a no no

    The Gov have brought this on themselves and show daily that they are not that bothered

    They have designed a system to alienate LL`s and also the most vulnerable tenants who lack a real voice 

    Its a national disgrace


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

    Yes johnathan I totally agree government have a lot to answer for !
    & all they do is criticize LL for not
    Playing ball !... ?
    As I have stated on other UC threads I have found a huge improvement in the UC process of late.

    Not having any problems getting APA's set up from the start of the tenancy.

    At the moment my main criticism is housing element payments are paid throughout the month and not in one single payment as HB was and also there are separate payments for any outstanding rent arrears which are hard to keep track of.

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