Published On: Wed, Aug 28th, 2019

Universal Credit: Academic urges continued improvement amid new private landlord figures | Personal Finance | Finance

More than half of private landlords with Universal Credit tenants have seen them going into rent arrears in the past 12 months, it has been suggested in a new report. The research, titled State of the PRS (Q1 2019): A survey of private landlords and the impact of welfare reforms, reports that 54 per cent of private landlords who have let to tenants claiming Universal Credit in the past 12 months have said they have experienced them fall into rent arrears. Most of these landlords (82 per cent) said that the arrears began after their tenants started a new claim for or migrated onto Universal Credit. Last year, the number of landlords reporting Universal Credit experiencing rent arrears was higher, at 61 per cent.

According to the new findings, 68 per cent of landlords said that there was a shortfall between the cost of rent and the amount paid in Universal Credit.

The new research is by Edge Hill University academics Dr Tom Simcock and Dr Axel Kaehne of the University’s Unit for Evaluation and Policy Analysis, which was commissioned by the Residential Landlords Association.

Landlords who applied for direct payment of rent under Universal Credit reported that the process took, on average, almost eight and a half weeks.

Universal Credit claimants are paid monthly, although this may differ in Scotland and Northern Ireland, with recipients usually being responsible for paying the rent that may be needed to be paid.

Those who are behind on rent may be able to have the housing payment, should they get one, sent directly to their landlord.

This is known as an Alternative Payment Arrangements (APA), and both claimants and landlords can make the application.

Dr Simcock, a Research Fellow at Edge Hill University and lead author of the report, said: “With the process of direct payment of rent to the landlord taking nearly eight and a half weeks to arrange and with landlords reporting that the main reason for repossession of a property is rent arrears, the research suggests that further work is needed to speed up the process to keep Universal Credit claimants in their home.”

He added: “The findings show that private landlords and tenants are struggling with the impacts of welfare reforms introduced by successive governments.

“While the data does indicate improvements in the proportion of landlords with Universal Credit tenants falling into arrears from the previous year, the findings show continued work is needed to improve the lives of claimants.

“The fact most private landlords are unwilling to let to tenants who claim benefits, or where there is a gap between the benefit level and rent, means that benefit claimants are facing difficulty in securing affordable accommodation in the private rental sector.

“To ensure claimants can find an affordable home, there needs to be an end to the benefit freeze to bring Local Housing Allowance [LHA] rates in line with the current 30th percentile of private rentals in an area to avoid shortfalls.”

A Department for Work and Pensions (DWP) spokesperson said: “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 per cent advances available from day one of a claim.”

An additional two weeks’ housing benefit has been introduced, for people moving onto Universal Credit from the old system, in a bid to help with the transition to monthly payments.

The DWP also said they’re increasing support for low-income households in areas where LHA rates have diverged the most from local rents.

Some people may wonder what the amount they’re entitled to on Universal Credit is.

Eligible applicants are able to get the standard monthly allowance – which depends on age and whether it’s a single person or a couple applying.

They may also be able to claim additional amounts – such as if they have children or a limited capability for paid work.

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