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Universal Credit sends rent arrears soaring

The number of people seeking advice over rent arrears has increased by 47% over the past five years due primarily to the roll-out of Universal Credit, according to a new report.

Citizens Advice Scotland (CAS) published a paper yesterday in which it blamed changes to the social security system for the hike in the number of people facing problems paying their rent.

The report found that the most common reasons for rent arrears were a benefits issue, loss of income or unexpected costs, with incidence of rent arrears significantly higher among tenants receiving Universal Credit.


The CAS report - Our Rent Arrears - Causes and Consequences - found:

+ The growth in rent arrears advice coincided closely with changes to the social security system;

+ Almost a quarter of those living in rented accommodation have experienced rent arrears in last five years;

+ CAB clients with rent arrears are more likely to be in part-time employment or unemployed;

+ They are more likely to be single person or a lone parent, to be aged between 25 and 44, and to live in the 20% most deprived areas.

CAS spokesman Rob Gowans said: “The rise in rent arrears is one of the most worrying trends we see across the Citizens Advice Bureau network at the moment.

“While there are a number of factors driving this, we have no doubt that the flaws in Universal Credit are one of the main ones.

“For the past 18 months we have been calling for a halt and fix to Universal Credit.

“We have set out again today the key flaws that need to be addressed, including reducing the waiting period before payment, cutting out processing delays and reducing deductions.

“These are relatively simple changes that could make a huge difference to millions of people.”

Separate analysis of the impact of Universal Credit, compiled by the Policy in Practice consultancy, has revealed that almost two in five households in receipt of benefits would lose an average of £52 a week, and this has led to a sharp rise in the number of private landlords with tenants receiving Universal Credit going into rent arrears.

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    NO DSS ? Can you wonder why most of us say NO DSS, we know we aren't going to get paid if we rent to someone claiming benefits so why would we?

  • James B

    And shelter want these tenants just installed like any other tenants ! Yeah right

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    As Andrew above quite rightly said, why would any landlord accept claimants on housing benefits/universal credit?

    Especially as, if they are evicted through rent arrears, the chance of getting it back are slim to none whereas employed tenants more likely to worry about having a CCJ but can also have an attachment of earnings order issued in extreme cases.

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    Its the extra work it creates for landlords and agents- we have multiple requests for letters and statements. Our rents are due calendar monthly in full and in advance by D/D. We get none of that with benefit tenants. When it is eventually paid it is 4 weekly not calendar monthly. It is always in arrears. It's usually incomplete and contains odd pence not rounded pounds. Not to mention a possible clawback if later deemed to be calculated incorrectly. Tenants are often quizzed about other occupants and rooms in the same building if they live in HMOs. #wrong

    James B

    Pretty much covers it .. then throw in the mix they are stopped frequently when tenants don’t do the necessary to renew claims or get jobs part time.. I could go on, they are endless work to keep going.. then try get one out and council say ignore your notices until landlord goes to court for a bailiff !

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    If the Government or local council wants us to let to DSS tenants then they should guarantee that the landlord won't be out of pocket, with full rent and all remedial work paid in full, no quibble, for the entire length of the tenancy. We can get such guarantees from normal renters' guarantors so why should we settle for something worse from DSS tenants?

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    Benefit Recipients are often excellent tenants but all sadly get tarred with the same brush as the minority that are not. Many mortgages and insurance companies specifically excluded then as permissible tenants. Coupled with that, unless they have a suitable guarantor, rent guarantee indemnity insurance is not available as the tenant won't pass references. Many landlords therefore can't take HBRs without breaching the terms of their mortgage and/or buildings insurance, which is highly inadvisable. Coupled with the absence of ability to take out rent guarantee insurance this renders HBR's unattractive tenants.

    Unless there is a change policy somewhere along the line the future looks very bleak for this type of tenant in the PRS especially if Universal Credit makes arrears more likely, as a tenant with arrears will automatically fail references even with a gold plated guarantor.

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    Tax payers money should NEVER be abused in this way.

    All rent money should AUTOMATICALLY go direct to the landlord. This would reduce rent arrears and reduce the number of evictions through the courts or tribunals.

    This ensures tax payers money is 100% used for what it was intended to be used for.

    There is so much waste in the system and so much money can be saved by this simple shift in policy.

    Its simple though.... Do not rent to tenants on benefits / Universal Credit

    James B

    Incredibly councils could not care less if tenants keep the rent .. in any other walk of life it would be fraud .. but not for benefit tenants, you can claim for rent and keep it and get away with it completely !

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    A sensible landlord who runs his portfolio as a business, as he should be doing will Not take on any persons who recieve Benefits via UC.
    If council give a " bond" and guarantee any damage to be put back as is was before tbeir client moved in and any arrears will be cleared up And Full rent is paid direct to Landlord then consider them as a tenant otherwise stay clear if you value your business.


    As you say, taking on benefit tenants is too risky and I can't see the councils being in a position to guarantee payment for damage etc, given the fact that most of them are near bankruptcy.
    Also, I would add, (and where I slipped up recently) make sure that the working tenant(s) has enough income to cover the rent, taking into consideration his or her other outgoings.

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    Do not fall for council paying the bond on behalf of the tenant. They will always dispute any claims. The tenant has no onus on them. Yes Council should pay direct but they years ago followed The Rugg report. Result we don’t take on hb tenants. Rugg report has resulted in HB being discriminated


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