The Government has announced a new online system that will pay private landlords the rent directly to them for tenants on Universal Credit.
The online system will aim to give landlords more security and crucially confidence in the system after a report found two in 10 landlords refuse to let to tenants in receipt of Universal Credit.
The government was compelled to act after a report found thousands of properties on the market are carrying express instructions not to let to potential tenants that are in receipt of Universal Credit.
Unlike previous benefits, claimants of Universal Credit are paid one monthly lump sum. Tenants must budget accordingly based on that amount and out of that lump sum they need to pay the rent to the landlord.
The British Landlords Association’s own research has found letting agents found the Universal Credit inefficient and as many as 38% were not prepared to take on any tenants on Universal Credit.
One agent in Rock Ferry, Wirral who did not want to be named, said “at times we rang the number we were given only to find it did not work, we later found the number had changed without notice. When we did get through even when we had written consent from the tenant the Universal Credit department were coming out with excuses not to even speak to us, we were spending a ridiculous amount of time just trying to deal with Universal credit tenants. We then had no choice but to stop taking on anyone who was on Universal Credit. We simply cannot afford to spend the time required for administration when dealing with universal credit tenants.”
He added ” other agents are doing the same, it’s a system that’s not working”.
However, the charity Shelter said that combined with the five week wait for initial payments, it’s led to a spike in homelessness since being pushed through.
James Brokenshire, secretary of state for housing, communities and Local Government said on Friday: “The measures announced today will ensure that landlords can receive rent from those on Universal Credit directly into their accounts.
“This important change will help strengthen the choices and opportunities available for those on Universal Credit to secure the homes they and their families need.”
At present, 20% of claimants with housing costs already have rent paid directly to the landlord.
Amber Rudd, secretary of state for work and pensions, said: “One third of UC claimants in social rented housing have their rent paid direct to the landlord.
“But in the private sector that number’s only 5%.
“People in the private rented sector already face a far higher risk of losing their tenancy.
“And I know from talking to claimants and landlords that the current system isn’t working for some of them.
“So we need to make it easier for tenants in the private sector to find and keep a good home by giving landlords greater certainty that their rent will be paid.
Author; Tracy Hemming
Date; 11th of January 2019