RLA: Universal credit forcing tenants into rent arrears
Universal credit is causing tenants to fall behind with their rent according to the latest research by the Residential Landlords Association (RLA).
Over half (54%) of 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 onto the credit from housing benefit.
A further 68% of landlords argued that there was a shortfall between the cost of rent and the amount paid in universal credit.
The research also revealed that over a third (36%) of landlords said that they had buy-to-let mortgage conditions which prevent them from renting to benefit claimants.
The RLA is calling on the government to do more to prevent rent arrears occurring and lists recommendations including ending the five week waiting period to receive the first universal credit payment.
David Smith, policy director at the RLA, said: “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.”
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, known as an alternative payment arrangement (APA).
A Department for Work and Pensions spokesperson responded to RLA’s research: “Many people join universal credit with existing rent arrears, but this number falls by a third after four months, and the number of landlords reporting universal credit tenants experiencing rent arrears has fallen over the last year.
“The best way to help people pay their rent is to support them into work, and universal credit is helping people to get into work faster and stay in work longer than the old system.
“We continue to work closely with landlords and tenants to make improvements to universal credit where necessary, including 100% advances available from day one of a claim.”