Over a third of private landlords with tenants receiving Universal Credit say that they are now facing rent arrears, a figure that is up 10 per cent since last year.
According to data from a recent survey by the Residential Landlords Association (RLA) of approximately 3,000 private landlords, 38 per cent of investors reported experiencing the issue of tenants going into arrears. This is up from 27 per cent in February 2016.
The average amount in arrears owed to private sector landlords by Universal Credit tenants is now £1,150, according to the RLA.
The RLA has voiced fears that government’s plans to speed up the rate at which Universal Credit is rolled out across the country from next month will be a mistake, leading to more landlords out of pocket. Unless there are urgent reforms to the programme, both private landlords and tenants may suffer, with many private sector landlords potentially refusing to rent to tenants on benefits for fear of facing rent arrears.
The RLA has called for measures to cut the seven-week period that claimants have to wait before they can begin to receive Universal Credit. It has also suggested measures that will allow payments to be made directly to the landlord when they are facing rent arrears, in order to swiftly solve the issue.
RLA vice chairman, Chris Town, said: ‘Whilst we continue to welcome the principle of simplifying the benefit system, it cannot be right that as it is currently designed, Universal Credit is leading many more tenants into rent arrears. This is not financially responsible and does nothing to encourage landlords to house people needing to claim benefit. We have already met with the Minister and are heartened that the Department understands the need to address the problem of rent arrears. With just weeks to go before the roll out of Universal Credit gathers pace we need action sooner rather than later.’