Landlords with tenants on Universal Credit are struggling to set up Alternative Payment Arrangements because the UC portal is closed to new claimants.
As a result, some landlords are obliged to serve notice on tenants according to specialist advice service Caridon Landlord Solutions.
It says the Department for Work and Pension is overwhelmed by new claims, and in response the department has closed access to the portal for new claimants.
“The pressure that DWP must be under due to the rise in claimants is enormous, but when tenants are struggling to meet their rent payments, we know that APAs not only have a significant impact on limiting arrears, they also help to sustain the tenancy” says Sherrelle Collman, Caridon’s managing director.
“The government wants landlords to support tenants, but there has to be a middle ground. The landlords we are speaking to say they are going back and forth on the phone, only to be told they will be called back by a case manager, then hearing nothing” she continues.
“We’ve seen a 20 per cent uplift in landlords wanting our assistance to set up APAs, and all were at the point where they were considering serving notice to their tenants because they had no other choice.”
Last year the DWP launched an online landlord portal to allow landlords to verify rent and submit managed payment requests online, rather than by email.
This meant if a tenant was having difficulty meeting rent payments, the landlord could request to set up an APA, ensuring the housing element of the tenant’s Universal Credit payment would be paid directly to the landlord.
Many tenants, particularly in the social sector, find this an easier way to help them budget.
However, Caridon says that since the start of the COVID-19 pandemic, the number of people claiming Universal Credit across the UK has risen from 2.9m in February 2020 to 5.9m in January 2021.
Many of these people will be tenants who previously signed up to private tenancies based on their income at the time, but due to Covid-19 are now facing changes to their employment status and finding that Universal Credit simply does not cover their rent.
Paul Shamplina, founder of Landlord Action - who is also inundated with calls from desperate landlords - adds: “Universal Credit faces heavy criticism from landlords and tenants at the best of times. If landlords are now confronted with yet another barrier to access direct payments, it is inevitable that many more landlords will be encouraged to serve notice on those tenants in receipt of Universal Credit, which goes against the government’s intensions.”
And he continues: “Clearly the government needs to provide more resource to facilitate the onboarding and management of the Universal Credit system so that landlords and tenants can work together.
“Many landlords with tenants who have suddenly had to start claiming Universal Credit are aware that their tenants cannot meet previous rental payments, but if a portion of it is allocated to the landlord then that provides a temporary solution for both parties, helping to sustain the tenancy for longer.”