Universal Credit Creates Rent Arrears Storm
A parliamentary debate held earlier this month (September) saw MPs from both sides of the house getting a little hot under the collar, arguing about how payment of the new Universal Credit benefit, due to be introduced next year, should be made.
Universal credit is set to take over from Local Housing Allowance (LHA) and controversy surrounds the fact that ALL payments will be made directly to the claimant rather than to their landlord or the letting agent managing their rental property – just as LHA payments are paid now.
During the debate, Labour MP Alex Cunningham raised the concern that the new Universal Credit could result in large rent arrears being accrued and an increase in tenant evictions if payments are made directly to tenants, and claimants living in private rental properties should be given the option to have the payments made direct to their landlords.
Department for Work and Pensions (DWP) minister Iain Duncan-Smith however vehemently defended the decision for direct payment stating that “Benefit claimants shouldn’t be treated like children who can’t manage their own pocket-money. Claimants would benefit more by showing them trust, and that by doing so they would be more likely to cope better when they return to work.
The Residential Landlords Association (RLA), the National Landlords Association (NLA) and homeless charities Shelter and Crisis, have all lobbied the Government to give claimants the ability to choose how the benefit is paid, but they require the support of all UK landlords.
Property professionals, letting and managing agents, property investors and landlords need to get the weight of support behind the campaign and your help is required, please Sign the e-petition here.
UK landlords are warned to prepare for the worst case scenario and act quickly to evict tenants if rental arrears exceed 8 weeks, as it remains to be seen if the current rental arrears problems will worsen with the new Universal Credit benefit system.
If you have a problem with tenants in more than 8 weeks rent arrears please contact us and we can start eviction proceedings for you. Call Now on 0844 567 4001