This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
A Sky News report has suggested that landlords are staying away from benefit claimants, for fear that they will turn out to be non-payers.
Decline
The figures, obtained from the National Landlord’s Association, show that only 22% of people on benefits currently are being let to by landlords, compared to 46% only three years ago.[1]
More alarming figures suggest that 52% of landlords have said that they will not consider people on benefits when letting their property. This is attributed to the fact that around seven in ten landlords who have let to a tenant on benefits have experienced rent arrears.
Universal Credit Scheme
The report has come at a crucial time for the Government, with Work and Pensions Secretary Iain Duncan Smith about to be quizzed by MP’s on the upcoming Universal Credit Scheme. This scheme will see six benefits condensed into one monthly payment. It was hoped that the scheme would be implemented by 2017, but reports now show that up to 700,000 claimants could have to wait longer for the reform.
Dogged by difficulties
Sky News’ political correspondent Anushka Asthana was scathing in her assessment of the Government’s attempted welfare reforms. Asthana said, ‘The Government’s flagship welfare reform forces people to budget by paying their benefits in one monthly lump sum.
“It has been dogged by difficulties amid accusations of weak management and a timetable that keeps on slipping.
“Now fears are rising about the human consequences of this massive reform.[1]’
Landlords avoid benefit tenants
Delays
Figures published alongside the Government’s Autumn Statement gave a further bleak outlook for the Universal Credit Scheme. Instead of the expected 1.7 million claimants in receipt of the benefits in 2014-15, it is now expected that there will be far fewer. Furthermore, instead of the targeted figure of 4.5 million 2015/16, it is thought that this number will now be just 400,000. [2]
This expected failure has brought a predictable attack from Labour. Their shadow Work and Pensions Secretary, Rachel Reeves, said that, ‘David Cameron and Iain Duncan Smith repeatedly promised to deliver their flagship policy, Universal Credit, ‘on time and within budget’. That claim, and the credibility they staked on it, now lie in tatters.’[2]
Reeves went on to say that, ‘these OBR figures tell the truth of how David Cameron and Iain Duncan Smith have broken their promises on a spectacular scale.[2]’
Duncan-Smith certainly faces a difficult few months as the Universal Credit Scheme controversy builds.
[1] http://news.sky.com/story/1179638/landlords-avoid-tenants-on-universal-credit
[2] http://www.landlordtoday.co.uk/news_features/Landlords-%E2%80%9Cavoid-benefit-claimants%E2%80%9D
