There was little mention of the private rental sector in the Autumn Budget announcement this week, but there has been a change to funding for Universal Credit, which may result in some much-needed improvements.
With the recent call from Sir Vince Cable, leader of the Liberal Democrats, to halt the rollout of Universal Credit, due to the rise in rent arrears that it seems to be causing, the news that some may have been hoping for has not been delivered. However, Chancellor Philip Hammond has stated that an extra £1.7 billion will be put towards the scheme.
Hopefully, this will help the operation run more smoothly and fix the issues that many tenants have been having with delays to their benefit payments.
Mark Pilling, Spicerhaart Corporate Sales managing director, has said: “We welcome the news that the Chancellor has decided to pump £1.7 billion into Universal Credit but are concerned with his decision to stick with the reforms, despite its issues.
“Because, since the announcement in 2010 that income support, Jobseeker’s Allowance, Employment and Support Allowance, Housing Benefit, Child Tax Credit, and Working Tax Credit would be merged into one single ‘Universal Credit’ payment, it has been plagued by problems.
“The main issues are that it takes up to 35 days to reach a claimant, and in many cases, those on benefits are receiving considerably less as a result of the changes. The chancellor says the changes will help 2.4 million working families and that he will put measures in place to help with the transition, but whether this helps or not will remain to be seen.
“So far, the knock on effect of has been huge with two-thirds of private landlords with tenants receiving Universal Credit reporting problems with non-payment and arrears. Let’s hope his changes will address some of the issues, otherwise we are in real danger of seeing more tenants going into arrears, which in turn will see landlords in arrears and more repossessions as a result.”
If this issue has affected you, as a landlord, don’t forget that Rent Guarantee Insurance can help with such situations.