Angry private landlords have branded the Government’s handling of its flagship Universal Credit scheme as “shambolic”, as a growing number warn that missed and delayed rent payments will lead to a rise in homelessness and have a disastrous impact on the private rented sector.
A survey carried out by the Residential Landlords Association (RLA) found that private landlords are becoming increasingly frustrated with the new system, with a growing number saying they may be forced to refuse to rent properties to low-income Universal Credit claimants due to rent delays.
Universal Credit merges a number of existing benefits into one single monthly payment, including housing benefit. The majority of claimants will be made responsible for paying their own rent, rather than the current system where housing costs are typically paid directly to landlords.
Universal Credit includes a system that allows landlords to request direct payments if they believe tenants may struggle to manage their finances and pay their rent. But DWP delays in processing applications, and poor communication from the department, has resulted in tenants falling behind on rent repayments.
“The Universal Credit system is mysterious, unresponsive and devoid of communication”, said one landlord who responded to the survey.
“I have made three applications. I received one payment, but no statement and I have no idea what the payment was for. I have not received any communication in response to the other applications.
“There are very long delays which are unacceptable as arrears mount and I still have to pay the mortgage with no rent income.
“This is a disaster and will result in increased homelessness.”
Landlords also say that the transfer from Local Housing Allowance to Universal Credit has resulted in missed and delayed payments, leaving their tenants in arrears.
Others expressed serious concerns over whether the DWP would be capable of managing increased demand as Universal Credit is rolled out across the country. DWP statistics show that 203,392 people were on the Universal Credit caseload, as of 11th February 2016. But millions of people are expected to be receipt of the new benefit if the roll-out is ever finally completed.
Responding to the survey, one landlord told the RLA: “I will stop renting to people on Universal Credit as I won’t get rent to cover mortgage payments.
“The system whereby tenants get payment rather than the landlord is shambolic, universally disliked, makes tenants vulnerable to addictions and homelessness and prevents landlords from renting to people in receipt.”
Richard Jones, RLA policy adviser and company secretary said: “Universal Credit and associated reforms make it harder to rent to people on low incomes or housing benefit and we have a building body of evidence that the changes are making it harder for people in difficult situations to get their lives back on track.
“We acknowledge that the Department for Work and Pensions has taken some action to correct things, but there is still a lot of work to be done.
“The issue is whether the DWP can deal with the scale of these issues, given that they have only been dealing with the simple cases so far.”
The RLA say they will be meeting with Government officials to discuss their concerns.