UK landlords are concerned about
the impact Universal Credit
will have on the private rented sector
70% of landlords who currently let rental property to tenants claiming housing benefits are worried the welfare reforms will have a negative effect on their business, according to the National Landlords Association (NLA).
75% of Landlords with larger property portfolios (20+ rental properties) are the most anxious about the benefit changes, fearing the worst when it comes to the impact of Universal Credit on the private rental sector.
David Salusbury, Chairman of the NLA said “Landlords are understandably concerned about the impact of Universal Credit, particularly as the London trials have seen deductions from Local Housing Allowance (LHA) payments to cap a household’s overall benefits package. The cap effectively takes away the money intended to ensure rent is paid. It is essential that landlords work with their tenants now to ensure those who are unsure about the impact of the changes are actively seeking advice on budgeting for monthly payments. Landlords could end up in financial difficulty if tenants struggle to manage their monthly incomes and fail to pay their rent.”.
In April 2013, Southwark Council, pilot area for the introduction of the Universal Credit scheme, had already seen rent arrears increase dramatically since the scheme’s introduction.
Sim Sekhon, director of Legal4Landlords.com fears Universal Credit would lead to many landlords being left out of pocket, stating: “Ever since the Local Housing Allowance changed so that tenants would be paid directly, there has been a problem, but Universal Credit will create even more of a problem. Landlords are becoming more hesitant to rent to tenants on benefits, unless they’ve got a solid working, home owner to act as a guarantor or they pay the rent upfront. People on benefits are going from being drip-fed their money weekly to being given it in a lump sum every month, which they just can’t manage properly. Around 60% of the tenants evicted by Legal 4 Landlords in 2012 were claiming housing benefit and they didn’t prioritise their rent payments – they pay other bills first and their rent is their last priority” .
Legal 4 Landlords want to hear from landlords who are worried about the impact that Universal credit will have
on their rental property business. Please leave your comments below
Read the original post By Emily Spaven 12th June 2013