Landlords move away from renting to Universal Credit Tenants
Landlords are showing their distrust of the new housing benefit system by alienating Universal Credit tenants. Many landlords are now opting not to have these tenants due to the increased risk associated with housing those on claiming benefits.
The new Universal Credit system means that it is the tenant who receives all the funding directly and are then responsible to pay their landlords the right amount and on time. Many landlords question whether the increased control of finances for Universal Credit tenants will actually improve their financial independence or just lead to more problems.
One such landlord, Mr Wilson of Kent, who has around 1,000 properties, has recently served eviction notices to the 200 tenants who claim housing benefits. Mr Wilson said that nearly 50% of them default on payments and he is switching to working Eastern European tenants who he has never had a problem with.
There is an alternative route open to tenants who are struggling to pay their landlord themselves from Universal Credit. However it is now the landlord’s prerogative to seek Alternate Payment Arrangement such as the old direct payment.
Defaults and damage – some of the problems associated with renting to those claiming benefits.
In a survey carried out by Spareroom.co.uk it found that since the introduction of the Local Housing Allowance (LHA) back in 2008, which also allowed tenants to intercede the direct landlord payment, 88% of landlords found a negative impact due to late payments and property damage.
The National Landlord Association have released figures showing that 8/10 of their landlords would not even consider renting out a property to those on benefits. An NLA spokesman said taking on tenants on housing benefits is a greater risk for landlords, as benefits have not kept up with rent levels in recent years.