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Landlords 'misunderstanding' the impact of Universal Credit
By Simon Thompson |
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Fears that thousands of private tenants will be turfed out of their rented homes with the introduction of Universal Credit is leading to sector leaders to raise concerns about the lack of understanding over the issue.
Already, some large private landlords are hitting the headlines after handing quit notices to tenants before the introduction of universal credit in April. Many believe that their rent will not be paid on time because of changes in how the welfare payments are made.
Indeed, the National Landlords Association (NLA) has carried out a survey that reveals that while many of the UK's landlords know that the current benefit system is being revamped they are not entirely clear on what will happen.
Landlords don’t understand Universal Credit
The Association's survey found that only 30% of landlords are aware of the changes to the benefits system and what universal credit will mean to their business.
Worryingly, 21% of landlords said they were unaware of universal credit and its potential impact.
The move to universal credit is controversial because it will replace six benefits with one monthly payment – the biggest change affecting landlords will see housing benefit being paid directly to tenants rather than to the landlord, as currently happens.
However, the same research found that 20% of tenants preferred to have their housing benefit paid to the landlord to help falling into arrears.
The NLA's chairman, Carolyn Uphill, said: “As the universal credit programme has been progressing, benefit payments haven't kept pace with rents while welfare cuts have been made. This situation is creating concern among landlords that their tenants could fall behind on rent as their finances are squeezed.”
She added that landlords are unlikely to allow tenants in receipt of universal credit to move into their property, particularly with demand growing from other types of tenants.
Government must rethink housing benefits payments
The NLA is urging the government to rethink its position of paying housing benefit to tenants rather than the landlord and retain the current situation which will give landlords the confidence they need that the rent will be paid on time.
A similar survey by online letting agent Makeurmove.co.uk has found that one in three landlords were unaware of what universal credit was and when it was being implemented.
Whereas 40% of landlords said they had heard of the scheme and just 27% said they had a full and proper understanding of what universal credit was and its impact on their business.
It's this lack of understanding, says the firm, which helps to explain why some landlords are refusing to accept LHA tenants.
Company director Richard Francis said landlords are clearly worried that under the new scheme they will see an increase in rent defaults which is prompting many to say they will not support housing benefit tenants.
He added: “Rather than being paid weekly, universal credit will be paid monthly with the aim of helping recipients to learn how to budget properly.
“Private landlords, currently, accommodate more than one million people who have all or part of their rent paid for by the state. The rental market is growing with more than 300 people looking for housing benefit every day to help keep a roof over their heads.”
He said that unless this issue was addressed properly, then increasing numbers of private landlords would refuse to accept tenants which in turn would create a 'major problem' for the government.
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New Section 21 rules cause landlord confusion |
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New Section 21 rules cause landlord confusion
New Section 21 rules are causing confusion among letting agents and landlords, says one law expert.
The new rules come into effect from October for tenancies created before October 2015.
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