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RLA: Pay Universal Credit Directly to Landlords to Stop Rent Arrears
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
The Residential Landlords Association has come out in support of the position that tenants receiving Universal Credit (UC) should have the right to choose whether the housing element of the benefit is paid directly to their landlord. They agree with the findings of a Smith Institute report commissioned by Southwark Council.
Southwark was at the forefront of the rollout of full service UC, and therefore has a longer period of data to back up the findings of the report. The reports found that there is ‘a noticeable decrease’ in the levels of rent arrears for those claiming UC in 2018 when compared to 2016 and puts this change down to the earlier and increased use of alternative payment arrangements (APAs).
The report adds: “Originally designed to apply to a handful of cases, more than 40% of Southwark tenants claiming UC have now entered into APAs with the council to help manage their finances”.
Under current rules, landlords may apply for an APA, but only after two months of rent arrears have accrued.
David Smith, Policy Director the Residential Landlords Association, said:
“Our own research finds that over half of landlords with tenants on Universal Credit have seen them fall into rent arrears in the last year.
“Today’s report demonstrates that arrears are lower under direct payments to landlords and supports our call for the Government to give all tenants on Universal Credit the ability to choose to have the housing element paid directly to their landlord.
“Many tenants feel more comfortable with managing their finances knowing that their rent is paid and it should be up to them to be free to make that decision.”
