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Universal Credit cut today - landlords’ last gasp criticism

Today the government will go ahead with a planned cut to Universal Credit of £20 per week. 

The level of welfare support had been increased in light of the impact of the pandemic on household incomes.

With rent arrears at historically high levels, the National Residential Landlords Association has made a last-gasp statement saying this cut will significantly worsen the levels of rent debt accrued by tenants across the private rented sector. 

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According to official government figures, almost 1.5m renters across England and Wales could stand to lose £1,000 a year as a direct result of today’s announcement.

And according to the 2019/20 English Housing Survey, 14.4 per cent of privately rented households in receipt of benefits were behind on rental payments. Over the course of the pandemic, the overall proportion of privately renting households in arrears tripled. 

Many more households will be forced into a perilous financial position due to the impact of the end of the furlough scheme and today’s cut, the association claims.

 

Meera Chindooroy, NRLA deputy policy director, says: “During the pandemic we have found that many renters have built high levels of arrears, which they will struggle to pay off in future. With this in mind, today’s cut to Universal Credit is a short-sighted move that will only serve to worsen this ongoing rent debt crisis.

“Most landlords have offered flexibility where tenants have faced the financial impact of the pandemic, but they cannot absorb these losses indefinitely.

“Practical steps to address this problem can and should be taken to ensure those tenants in receipt of benefits can cover their rents. It is our view that not only must the government end the five-week wait for the first payment of Universal Credit, it should also ensure they can choose to have the housing element of their Universal Credit payments sent directly to their landlord.

“Besides addressing the consequences of this cut to Universal Credit, it is our belief that adopting this new approach will go a long way towards the creation of a fairer, more inclusive private rented sector which works in the interests of both landlords and tenants.”

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