Universal Credit was described by one national newspaper as an ‘ill-conceived shambles’ over the weekend, after former prime ministers Gordon Brown and John Major suggested that the government’s plans to complete the roll-out of Universal Credit risked provoking a response similar to the civil disorder that greeted the poll tax.
The breadth and depth of opposition to the way changes to the payment of benefits has been progressing is amazing, but not surprising, given the design flaws of the new system.
A comprehensive analysis of the impact of Universal Credit, compiled by the Policy in Practice consultancy, found that almost two in five households in receipt of benefits would lose an average of £52 a week, and this is having a catastrophic impact on vulnerable groups, which in turn is having an adverse affect on many buy-to-let landlords with tenants receiving Universal Credit.
Fresh research shows that almost two-thirds of private landlords with tenants receiving Universal Credit have experienced them going into rent arrears.
Based on responses from over 2,200 landlords, the Residential Landlord Association’s (RLA) research exchange, PEARL, has found that 61% of landlords with tenants on Universal Credit have experienced them going into rent arrears. This is up from 27% in 2016.
The study found that on average Universal Credit tenants in rent arrears owed almost £2,400, which is up almost half - 49% - compared to last year.
Some 53% of landlords with tenants on Universal Credit applied for direct payment to be made directly to them instead of to the tenant, known as an Alternative Payment Arrangement (APA).
Where successful it took, on average, over two months for this to be organised, on top of the two months arrears already accrued. This has caused arrears to build up substantially.
The RLA is calling for APA to be improved, which includes offering tenants the option of being 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 Universal Credit tenants leave a property owing rent.
RLA policy director, David Smith, said: “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.”