More reform to Universal Credit is needed says RLA.
Responding to a report published by Citizens Advice today showing 49 per cent of those it helps with Universal Credit are in arrears on their housing payments, Chris Town, Vice Chair of the Residential Landlords Association:
“Today’s report demonstrates the need for more changes to be made to Universal Credit.
“One of the main drivers of rent arrears has been that tenants cannot routinely choose to have the housing element of Universal Credit paid directly to their landlord at the start of a claim. Many tenants prefer to have the assurance that their rent is paid and their right to do this should be introduced immediately.
“This needs to be coupled with lifting the freeze on housing benefits and the housing element of Universal Credit. Housing cost support is simply not keeping up with the realities of rents in the private sector, despite them falling in real terms over the past year.”
The RLA’s most recent research shows that of those landlords with tenants on Universal Credit, 61 per cent experienced them going into rent arrears in the past 12 months. This is up from 38% last year and 27% in 2016.
A report for the RLA by experts at Manchester Metropolitan University noted that caps on the Local Housing Allowance Rate have been a key driver of homelessness from the private rented sector.
The Office for National Statistics shows that in the UK, average rents in the private sector increased by 1 per cent in the year December 2018, much lower than inflation.
The RLA’s research findings published last year are based on RLA PEARL’s quarterly survey to which 2,234 landlords responded. The full report can be accessed here
It found that of those landlords with tenants on Universal Credit, 61% experienced them going into rent arrears in the past 12 months. This is up from 38% last year and 27% in 2016.
The report for the RLA by Manchester Metropolitan University’s Policy Evaluation and Research Unit can be accessed here
It notes that: “the introduction in 2008 of the Local Housing Allowance (LHA) as a means of calculating Housing Benefit payments, and subsequent changes to LHA rates…is driving the increase in homelessness from the private rented sector.”
The Office for National Statistics Index of Private Housing Rental Prices, UK: December 2018, can be accessed here
It notes that: “Private rental prices paid by tenants in the UK rose by 1.0% in the 12 months to December 2018.”Inflation over the same period was 2.7% as measured by RPI and 2.1% as measured by CPI.