Labour’s symbolic victory over the rollout of universal credit on Wednesday night will have been welcomed by many buy-to-let landlords.
Tory MPs were ordered to abstain from the commons vote on the flagship benefits reform, but up to two dozen Conservative MPs have said they may support a Labour motion, which called for ministers to ‘pause and fix’ the controversial welfare reform.
From a landlord’s perspective there is concern that the housing element of Universal Credit is inadequate for a number of tenants to be able to cover their rent, which largely explains why new research from the National Landlords Association (NLA) has found that 20% of landlords would be unwilling to let to tenants in receipt of housing benefit or universal credit.
The study, taken from the NLA’s Quarterly Landlord Panel, also reveals that that two in three landlords who let to housing benefit recipients say they have fallen behind on rental payments in the last 12 months.
The NLA has already identified several problems the new system is causing landlords, and why so many are shying away from accepting Universal Credit tenants. These include:
+ Difficulty communicating and interacting with the Universal Credit administration system.
+ The time and effort it takes to secure direct payment of the housing element of Universal Credit to the landlord.
+ The six week waiting period causing tenants to be two-months in rent arrears by the time of the first payment.
+ The National Landlords Association (NLA) is calling on the Government to pause the national roll-out of its Universal Credit project and to lift the current freeze on housing benefit rates.
Richard Lambert, chief executive officer of the NLA, said: “Underlying all the problems with Universal Credit is the freeze on housing benefit rates, which means that the housing element of Universal Credit is simply insufficient for many tenants to be able to cover their rent.
“The decline in social housing means that some of the most vulnerable in society can only turn to the private rented sector. We have long called for the freeze to be scrapped as it creates a barrier that prevents claimants from securing the housing they need.
“If the government is serious about helping then it needs to press pause on the roll out of Universal Credit, and fix its underlying problems. Otherwise more and more people will find themselves homeless as the proportion of landlords who consider themselves able to house those who need it most will keep on falling.”
Despite growing opposition, Theresa May refused to pause the rollout of her government’s universal credit benefit on Wednesday.
“Pausing universal credit will not help those people who would be helped by moving to universal credit, getting into the workplace and bringing home more pay for their families,” the prime minister said.