With much controversy surrounding the new Universal Credit system, Landlord Action says it has concerns for both landlords and tenants over plans to dock tenants’ benefits to recover rent arrears. They say the whole system is flawed and needs to be looked at much more closely before being rolled out.
One of the greatest concerns for tenants is being able to manage their finances from a weekly to monthly basis and having to deal with taking one, in many cases reduced, payment in place of the various benefits and tax-credits previously available.
Paul Shamplina, Founder of Landlord Action, says “The new system is a big worry to landlords and tenants. At present it is at a council’s discretion to choose to make payments directly to a landlord and not via the tenant.
We know that it is only the minority of tenants that do not pass on housing allowance but we have worked with many landlords that have stepped away from the sector as a result.
As more tenants struggle with the new system, fewer landlords will feel confident enough to rent to this sector, creating an even greater gap between supply and demand of social housing.
What’s more, docking a tenant’s Universal Credit when they are already in a vulnerable position is not going to solve the problem. Most tenants are not refusing to pass on payments because they want to keep them, but because they can’t manage financially.
From a landlords point of view, five, ten or even twenty percent of a tenants Universal Credit payment would be a minimal and lengthy process towards paying off even one month’s rent arrears.
We need to stop tenants getting into arrears in the first place, and the only way to do this is with direct payments to the landlord. Our experience tells us this is what the majority of both landlords and tenants would prefer.”