x
By using this website, you agree to our use of cookies to enhance your experience.
STAY CONNECTED!
    
newsletter-button

TODAY'S OTHER NEWS

Thousands of landlords will now have tenants on Universal Credit

Universal Credit has had its problems and of course now it is going to be under an enormous amount of strain with almost one million people signing on in the last two weeks since being urged to stay at home because of coronavirus.

Around 950,000 applications have been made for Universal Credit, which is a significant jump from the usual 100,000 who apply each two-week period.

While all of them are not necessarily unemployed, as it is possible to apply while still in work, it does now mean that most landlords, who have never previously had tenants in receipt of benefits, now will. 

Consequently, Caridon Landlord Solutions is offering some advice for landlord to help tenants on Universal Credit.

Sherrelle Collman, managing director of Caridon Landlord Solutions, which specialises in providing advice to private landlords, letting agencies and housing associations on Universal Credit and Housing Benefit, says thousands of landlords who have no previous experience of the benefit system, will now have tenants on Universal Credit.

She commented: “As the true impact of Coronavirus takes hold, many people who have never previously needed to rely on the welfare system are having to apply for Universal Credit. Many will be anxious not only due to the current situation but because of the criticism Universal Credit has received since its introduction. 

“The good news is that more resources have been deployed to local authorities to help claimants, and measures such as immediate access to Advance Payments, increases to Universal Credit and raising the Local Housing Allowance rate to the 30th percentile of market rents from April, are being put in place.

“We have had a surge of calls from landlords and letting agents asking advice about how the process works and if they should apply for an Alternative Payment Arrangement for their tenant, which is where the housing element of UC goes straight to the landlord to cover the cost of rent.”

According to Caridon Landlord Solutions, there are four key steps landlords can take to help support their tenants who may now be applying for Universal Credit.

Step 1: Communicate with your tenant and support them as much as you possibly can.  If they are having to apply for Universal Credit, it is most likely because they have lost their job or had a significant drop in income. They will be concerned they could also lose their home.  Where possible, consider a rent reduction to meet the housing element of Universal Credit, some rent to help cover a mortgage is better than nothing, or if at all possible, offer a rent holiday.

Step 2: If your tenant has had to apply for Universal Credit because of COVID-19, they will require a letter from you verifying the rental amount, the address of the property they reside, and when the tenancy commenced. This will help them to qualify for the housing element of Universal Credit which will go towards covering their rent.

Step 3:  Work with your tenant to establish key dates, such as the tenant’s Benefit Assessment Period (the date their entitlement begins) so that you can see how it falls in line with the Tenancy Agreement.

Step 4: Many tenants prefer to have the housing element of Universal Credit paid directly to the landlord so they can manage the rest of their finances themselves. This is called an Alternative Payment Arrangement. Landlords should discuss this with their tenants and if in agreement, fill out a UC-47 form to apply for this.  If the tenant is already in arrears, the landlord can also apply for Third Party Deductions to reduce this, where an additional amount is taken monthly from the claimant’s personal allowance

Poll: Are you now expecting your tenants to switch on to Universal Credit?

PLACE YOUR VOTE BELOW

  • icon

    Good luck with the alternative payment arrangements. These are only being allowed as a last resort for renters who are vulnerable or at least a couple of months in arrears, even though a lot of tenants prefer direct payments to the landlord.

  • icon

    I like most other landlords will not even consider renting to someone on UC , however if an other wise good tenant lost their job I would not evict them, but if the rent then got into arrears I would have no choice other than to start the sec 8 ball rolling

  • Bill Wood

    I had a tenant some years ago who fell seriously behind on the rent, 3 months or so. A friend of mine suggested contacting the council to ask if they were receiving housing benefit. This I did, but the council refused to tell me. I then sent a letter to the council asking for the benefit to be paid to me directly, even though I didn’t know if the tenant was actually receiving any benefit. It worked! For the next 3 or 4 months I was paid about 80% of the rent directly. The modern equivalent, APA, is certainly worth considering

  • icon

    Think of how many problems would be solved if all the rent money (Housing Benefit) went direct to Landlords. Money would be getting used for its intended cause.

    Tenants would have more secure housing and there would be less arrears.

    Thats too sensible though I guess and will they learn, no, Government will continue to send the rent element direct to tenants.

  • Paul Barrett

    Be very careful people.
    'Clawback' of UC HB element could seriously damage your wealth.

    Try and have UC payments made from a CU.
    Then no 'clawback' from LL is possible.
    I know of a LL associate who 15 years ago had to repay over £13000.

    The claim wasn't valid and because HB was paid directly he had to repay it.
    So the tenant received free accommodation for over 3 years.

    It is extremely difficult for LL to know whether UC claims aren't fraudulent.
    Plus domestic circumstances change as these MUST be notified by the tenant to the DWP.

    If the DWP find out they will reclaim directly paid HB from the LL.
    Be very careful!

icon

Please login to comment

Zero Deposit Zero Deposit Zero Deposit
sign up