Industry news

Thousands of benefit claimants at risk of rental market rejection

Our research provides even more evidence that

the system is not working Steve Burrows, Landlord Secure

Thousands of Universal Credit claimants could be at risk of homelessness this Winter, as growing numbers of landlords refuse to consider their rental applications despite concessions made in the Budget. Research undertaken by the tenant

referencing and insurance agency Landlord Secure has found that 16 per cent of landlords would refuse to progress an application from any prospective renter who was in receipt of Universal Credit payments. This is despite estimates that over a third (37 per cent) of claimants are in employment. In addition a further 20 per cent of private

landlords said they would reject any applicant who requires support from housing benefits. Commenting on the findings, Steve Burrows,

managing director at Landlord Secure, said: “Universal Credit was introduced to help the poorest in society out of poverty, but our research provides even more evidence that the system is not working. “Whilst unfair, it’s hardly surprising that

landlords are unwilling to accept tenants who could be relying on Universal Credit to meet monthly rental obligations; particularly given the scheme’s six-week (soon to be five week) waiting time for first payments. The impending lettings fee ban, which many have predicted will create rent inflation, is only set to compound the issue. “However, there are those who - despite

receiving Universal Credit – are indeed capable of making rental payments, and in this respect the system is failing once again. Most landlords do not currently have access to an applicant’s financial history, so may automatically reject applicants based on their receipt of benefits, when in fact they would be financially suitable for the property. This could leave them in an extremely vulnerable position, without a roof over their heads. “The market needs to do more to provide the

kind of products that allow landlords to get the full picture of their tenant’s financial status so they can make better decisions that work for them and ultimately the tenant.” For the full findings visit: media for a copy of the research report.

£1.5bn package of reforms to Universal Credit welcomed

welfare benefits programme. Politicians, landlords and campaigners had


united in attacking elements of Universal Credit, saying it was adding to the poverty of thousands of vulnerable people on low incomes, many of them in work, but who were struggling to make ends meet. Eventually Chancellor Philip Hammond and

Work & Pensions Secretary David Gauke knew they had to act but the range of concessions made surprised many, making it one of the more welcome parts of the Budget. The measures announced include:

• abolishing the initial seven day waiting period to reduce the wait for payments from six weeks down to five from February 2018;

• extending the repayment period for advance payments from 6 to 12 months, and allowing people to receive 100 per cent of their payment upfront from January 2018 (people who make a claim in December can get a 50 per cent advance, and then in January can ask for a top up to 100 per cent);

• making it possible for people to apply for advances online from Spring 2018, making it even easier for a claimant to access an advance if they need it;

• paying an additional two weeks’ of housing costs after the end of someone’s Housing Benefit claim and into their Universal Credit claim from April 2018;

• making it easier for claimants to continue having their housing costs paid directly to landlords once they are on Universal Credit;

• local authorities being able to recoup over 80 per cent of the money they spend on temporary accommodation directly from the Department for Work and Pensions (DWP) rather than from the claimant, preventing losses of more than £70 million over 2018/19; and

• extending partnership working with Citizen’s Advice, to provide more face to face support to Universal Credit claimants.

The package of changes was welcomed by the Opposition spokesperson Debbie Abrahams, although she did criticise the implementation timetable, which means some of the changes will not take effect until April, the reduction of only one week in the waiting/processing period and the lack of flexibility over fortnightly payments.

FURTHER CHANGES However, Mr Gauke rejected Ms Abrahams’ calls for further changes to UC. He told the Commons: “We must remember that universal credit is aimed at

10 | HMM January 2018 |

he Government bowed to pressure from all corners to introduce a widespread package of changes in the Budget to its controversial

Politicians, landlords and campaigners had united in attacking elements of Universal Credit, saying it was adding to the poverty of thousands of vulnerable people on low incomes, many of them in work, but who were struggling to make ends meet

supporting those out of work to move into work, and, once in work, to progress and increase their earnings. That is why, in addition to these measures, the Government have allocated £8 million over four years to conduct a number of tests and trials to support development of the evidence about what works to help people progress in work. This is a comprehensive and wide-ranging package worth £1.5 billion, offering significantly more support than a simple reduction in the wait for the first payment to one month.” The Chartered Institute of Housing broadly

welcomed the changes, but suggested the Government should slow down its roll-out programme, so that further testing and analysis can be carried out. In particular the CIH wants to see administrative and processing delays reduced and more information and support given to claimants. One of the most costly elements to the measures

agreed by the Chancellor was to continue to pay existing housing benefit claims for two weeks, once a claimant moves onto UC. This will cost an estimated £550m and should greatly reduce the build up of rent arrears and prevent many evictions. It will take time for the impact of this to be seen and measured, but social and private landlords were particularly welcoming of this change. The Residential Landlords Association which

represents private landlords welcomed the changes, many of which they claimed to have been advocating for some time. They pointed to the planned issuing of guidance in December last year, to permit payment of the housing element of UC directly to landlords. They said this move was long overdue and could

stem the tide of PRS landlords refusing to provide accommodation to tenants receiving Universal Credit.

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