Earlier this week, the Liberal Democrat’s Work and Pensions spokesperson, Stephen Lloyd, warned that the government needed to introduce default payments to landlords in order to protect them against tenants receiving the housing element of the all-in-one benefit that fail to pay rent on time.

The MP had previously expressed his concern that the 1.5 million private sector rented tenants on housing benefit across the UK could, unless the government makes it easy for landlords to receive direct payments from tenants on Universal Credit, be in danger of losing their homes if they fall behind with their payments, because quite simply most private landlords simply cannot afford not to receive rents for months on end.

A recent study by the Residential Landlords Association (RLA) found that 73% of landlords still lack confidence in renting to tenants on Universal Credit due to uncertainty that they will be able to recover rent arrears.

Now the trade body has revealed several stories behind the statistics to show the true impact of the government’s flagship welfare policy on tenants and landlords, which suggest that further reforms to the way the Credit is delivered is required.

Case study 1

Brandon Taylor from Lowestoft provides homes to rent to around 130 Universal Credit claimants, of which 70% are struggling to pay their rent in full and on time.  In one extreme case, a tenant who was on Universal Credit accrued £2,848 in rent arrears. Where tenants accrue two months or more of rent arrears, landlords can apply for payments to be made directly to them, known as Alternative Payment Arrangements. When he has applied for this, Brandon has found requests to the Department for Work and Pensions have been ignored. Brandon warns that landlord confidence in Universal Credit has been damaged and that it will take years to regain that confidence back.

Case study 2

Linda Hazelwood, a landlord in the West Midlands, has told the RLA of a tenant in receipt of Universal Credit who she rents to in Halesown. The tenant is a young single mother who has just had another baby. Having been a tenant for at least five years, she now owes her landlord over £1,000 in rent. Linda says that the tenant does not want to be in arrears, but cannot afford to pay the rent on time. Another tenant of Linda’s in receipt of the Credit has accrued £900 of arrears. Expressing her frustrations about the system, she has warned that it is not doing enough to support those tenants, especially the vulnerable, who do not have access to computers in order to process and manage Universal Credit payments.

Case study 3

Sue Thompson and her husband Phil rent properties out across the North East of England, 90% of her tenants are in receipt of benefits, many of whom are in receipt of Universal Credit. She has noted that although the Government has slightly reduced the time between applying and receiving Universal Credit, paying tenants in arrears means that many are forced to “beg, steal or borrow” to keep going.  She warns that in such cases a tenants’ first payment is then swallowed up by repaying those debts often with high levels of interest or late fees with the vicious cycle of rent arrears starting all over again.