The Government’s new welfare system, Universal Credit, has been described as “shambolic” by landlords, with many saying they will now refuse to rent to tenants on benefits.
Research conducted by the Residential Landlords Association (RLA) indicates that the new scheme may have a disastrous effect on the private rental sector. The organisation found that landlords are frustrated with the new system, which sees benefits paid directly to claimants, who are then responsible for paying their own bills, including rent.
Landlords have also criticised the way that the Department for Work and Pensions is dealing with their enquiries and say the process for requesting direct payments from the Government is too long.
Universal Credit Scheme is “Shambolic”, Say Landlords
We have been providing landlord updates on the nationwide rollout of the scheme since the start of the year. For all of the postcode areas now on Universal Credit, see our latest piece: /universal-credit-almost-end-rollout/
One landlord that responded to the RLA says: “The Universal Credit system is mysterious, unresponsive and devoid of communication. I have made three applications. I received one payment, but no statement and I have no idea what the payment was for. I have not received any communication in response to the other applications.
“There are very long delays which are unacceptable, as arrears mount and I still have to pay the mortgage with no rent income. This is a disaster and will result in increased homelessness.”
The transfer from the old system to the new has also been slammed, with complaints about missing and delayed payments, leaving tenants in rent arrears. It has previously been reported that housing benefit claimants are being left in long-term debt.
The issue is now so severe that many landlords say they will no longer rent to tenants on benefits.
Another landlord insists: “I will stop renting to people on Universal Credit as I won’t get rent to cover mortgage payments. The system whereby tenants get payment rather than the landlord is shambolic, universally disliked, makes tenants vulnerable to addictions and homelessness, and prevents landlords from renting to people in receipt.”
The Policy Adviser for the RLA, Richard Jones, states: “Universal Credit and associated reforms make it harder to rent to people on low incomes and housing benefit, and we have a building body of evidence that the changes are making it harder for people in difficult situations to get their lives back on track.
“We acknowledge that the Department for Work and Pensions [DWP] has taken some action to correct things, but there is still a lot of work to be done. The issue is whether the DWP can deal with the scale of these issues, given that they have only been dealing with the simple cases so far.”
The RLA is currently organising meetings with the Government to discuss Universal Credit.
If you are a landlord with tenants on benefits, you can protect your rental income with Rent Guarantee Insurance, which ensures you still get paid if your tenant defaults.