With the introduction of newly proposed benefits scheme Universal Credit set for October 2013, landlords are beginning to express a number of concerns. Primarily, landlords are concerned that the new scheme will lead to an increase in tenants’ rent arrears.
Changes
At present, housing benefit is paid directly to landlords. Under Universal Credit however, this payment will instead be paid directly to tenants. Landlords have expressed that they are most worried about this part of the scheme, believing that not having a guaranteed payment from the Department for Work and Pensions (DWP) will lead to more missed payments. In addition, opponents to the scheme believe that some tenants will struggle further with budgeting and face a number of arrears.
Another concerning change proposed under Universal Credit is that unemployed tenants that find work will not receive any support until they receive their first wage packet. This has again led to an increased worry of spiraling non-payments.
Housing associations have also expressed their concerns. They believe that tenants in arrears, perceived or otherwise, may damage their credit rating.
However, the Government seems likely to keep their proposed plans for Universal Credit, believing that tenants will be able to take more control of their own finances as a result.