The new rules, that promise to offer more security to landlords and tenants, come after a report found 2 in 10 refuse to let to Universal Credit claimants
The Government has today announced a new online system that will pay private landlords of those on Universal Credit directly.
It comes after a report found thousands of properties in the market are carrying disclaimers that block people on benefits because of unreliable payments linked to the new six-in-one initiative.
Unlike previous benefits, claimants of Universal Credit are paid one monthly sum that they must budget accordingly.
This includes managing their rent and paying private landlords directly – however charity Shelter said combined with the five week wait for initial payments, it’s led to a spike in homelessness since being pushed through.
“The measures announced today will ensure that landlords can receive rent from those on Universal Credit directly into their accounts. This important change will help strengthen the choices and opportunities available for those on Universal Credit to secure the homes they and their families need.” secretary of state for housing, communities and local government, James Brokenshire, said on Friday.
At present, 20% of claimants with housing costs already have rent paid directly to landlord.
“One third of UC claimants in social rented housing have their rent paid direct to the landlord,” secretary of state for work and pensions Amber Rudd added.
“But in the private sector that number’s only 5%.
“People in the private rented sector already face a far higher risk of losing their tenancy.
“And I know from talking to claimants and landlords that the current system isn’t working for some of them.
“So we need to make it easier for tenants in the private sector to find and keep a good home by giving landlords greater certainty that their rent will be paid.
“Therefore I’ve asked the department to build an online system for private landlords so they can request where necessary for their tenants’ rent to be paid directly to them.”
According to the Residential Landlords Association the average amount owed by Universal Credit tenants in rent arrears has almost doubled in the past 12 months. It increased from £1,600.88 in 2017 to £2,390.19.
It ties into why eight in 10 landlords are reluctant to lend to those one benefits, in turn resulting in higher poverty.
Chris Town, of the Residential Landlords Association, said: “Our most recent research has shown that 61%of landlords with tenants on Universal Credit have seen them go into rent arrears, up from 27% in 2016.
“Improving, and speeding up, the process by which payments can be made directly to the landlord has been a central part of the RLA’s campaign on Universal Credit. Anything that helps this will give landlords much greater confidence in the system and ensure tenants have greater security in the knowledge that their rent payments will be met.”
Universal Credit rolls six working-age benefits into one monthly payment, but its implementation has prompted concerns from charities and MPs of all parties about causing unnecessary hardship for claimants during the roll-out.
On Friday, Work and Pensions Secretary Amber Rudd also said families on Universal Credit with more than two children will no longer be hit by a planned benefit freeze that currently penalises parents with a third child born on or after April 6, 2017.
The Government offers struggling Universal Credit households cash payments in advance to tide them over during any delays.
However, this is essentially a loan that’s taken out of later Universal Credit payments until the total amount is paid off. If you are worried about falling even further into arrears, you’ll need to act quickly on your other options.
If you haven’t contacted your landlord, do so straight away. Try to arrange an agreement that allows you to continue making your normal monthly payment plus an extra amount towards the arrears.
Explain to your landlord how much you can afford to pay towards the arrears and send them a copy of your budget to show you’re paying the most you can manage. Here’s StepChange’s guide to making a budget.
You can also suggest that you will pay back extra on top of your rent each month or each week over a certain period of time, until the arrears are paid off.
A landlord may agree to this rather than end your tenancy because they want to get back the money you owe.
Housing advice can be complex, these are the main Shelter contacts to follow if you need further guidance or support:
In England or Scotland, contact Shelter or Shelter Scotland. They have a telephone helpline (0808 800 4444) and a website packed with useful information.
In Wales, contact Shelter Cymru on 0345 075 5005.
In Northern Ireland, Shelter NI can point you to useful organisations that can help you if you’re struggling with rent arrears or eviction.
Contact your local authority if you’re at risk of homelessness because of eviction. Their housing department will be able to advise you about applying for social housing or emergency accommodation.