A new system for Universal Credit payments has been revealed by Work and Pensions Secretary Amber Rudd, over the weekend. There are high hopes that this will provide landlords with the certainty they need that tenants in receipt of Universal Credit will pay their rent.
Amber Rudd said: “One third of Universal Credit claimants in social rented housing have their rent paid directly to their landlord. But in the private sector, that number is only 5%.
“People in the private rented sector already face a far higher risk of losing their tenancy, and I know from talking to claimants and landlords that the current system isn’t working for some of them.
“So we need to make it easier for tenants in the private sector to find and keep a good home, by giving landlords greater certainty that their rent will be paid.
“Therefore, I have asked the department to build an online system for private landlords, so they can request, where necessary, for their tenant’s rent to be paid directly to them.
“And I will consider what else we can do, because I am determined to help keep people in their homes.”
With the Residential Landlord Association’s recent research showing that 61% of landlords with tenants on Universal Credit have seen them go into rent arrears, it is vital that changes are made, to improve the system.
Chris Town, vice chair of the RLA, has commented: “Improving, and speeding up, the process by which payments can be made directly to the landlord has been a central part of the RLA’s campaign on Universal Credit.
“Anything that helps this will give landlords much greater confidence in the system and ensure tenants have greater security in the knowledge that their rent payments will be met.”
RLA Policy Director David Smith has previously expressed the RLA’s eagerness for change, stating that “a major start would be to give tenants the right to choose to have payments paid directly to their landlord.
“This would empower tenants to decide what is best for them rather than being told by the Government.”
The main concern, however, is that it has not been clearly stated when this new system will be introduced.
Responding to reports that Amber Rudd will announce that the current benefit freeze will not last beyond the next year, Chris Town also said: “Independent research commissioned by the RLA has recently warned that the freeze in housing benefit rates has been a key driver of homelessness from the private rented sector.
“Unfreezing them will enable benefits to keep up with the reality of market rents.”