More than half the people claiming Universal Credit are in rent arrears, according to the Residential Landlords Association (RLA).
It reports that 54% 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% said that the arrears only began after a new claim for Universal Credit or after a tenant had been moved to it from housing benefit.
Some 68% 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).
According to the research, it took landlords an average of almost 8.5 weeks for an APA to be arranged. Consequently, 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% quite understandably said that they were concerned that their tenants might not be able to afford to pay their rent when they migrate to Universal Credit.
The research also revealed that 36% of landlords surveyed said that they had buy-to-let mortgage conditions which prevent them from renting to benefit claimants.
The RLA has proposed several ideas designed to help prevent rent arrears occurring in the first place, which it hopes the government will take into consideration.
the RLA wants to see all tenants from the start of a claim for Universal Credit offered the ability to choose to have the housing element paid directly to their landlord.
It also wants to see an end to the five week waiting period to receive the first Universal Credit payment, and well as an ending of the Local Housing Allowance freeze to ensure it reflects the realities of private sector rents..
According to the most recent statistics, 45% of households receiving Universal Credit with support for housing costs are in the private rented sector.
David Smith, policy director for the RLA, commented: “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.”
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