Universal Credit Fueling Rent Arrears in the Private Rented Sector

by | Sep 13, 2017 | Press Release, Welfare Reform & Homelessness

Over a third of private landlords with tenants receiving Universal Credit have said that they are now in rent arrears, up by over 10 percentage points since last year.

According to a recent research by the Residential Landlords Association (RLA) PEARL of almost 3,000 landlords, of those with Universal Credit claimants as tenants, 38 per cent reported experiencing tenants going into rent arrears. In February 2016 that figure was 27 per cent.

The RLA’s research has found that the average amount owed in rent arrears by Universal Credit tenants to private sector landlords is now £1,150.

With the Government set to increase the pace at which the Credit is rolled out across the country from next month, the RLA is warning of a ticking time bomb without urgent reforms.

Among the changes it is calling for are measures to cut the six week waiting period that claimants have to wait before they can begin to receive Universal Credit and measures to make it easier and quicker for payments to be made directly to the landlord where tenant arrears are building up.

RLA Vice-chair, 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.”

Read the full report here: https://research.rla.org.uk/report/welfare-reform-and-universal-credit-the-impact-on-the-private-rented-sector-2017/

Or read the latest blog post on the research by Senior Researcher Tom Simcock here: https://research.rla.org.uk/blog/government-regain-confidence-landlords/