Headlines: April 9th, 2014

Because of confusion over how rent arrears will be tackled under the Universal Credit, almost four in 10 larger landlords intend to reduce the number of properties they let to welfare recipients according to research from the British Property Federation.

The Federation said that landlord groups, NGOs and Government should all act to reduce the uncertainty of the impact of the Government’s flagship welfare reform after it found that 39% of landlords with more than 10 properties were intending to reduce the number of properties they let to those on housing benefit, when the change comes in.

Universal Credit combines six benefits into a single monthly payment. It is designed to offer greater protection to landlords from rent arrears, but the Federation said today that the result of its survey meant that this message was not accepted by many landlords. It called for greater dialogue between landlords, tenants, NGOs and government to clearly explain the implications of Universal Credit.

There is also a need for the Department for Work and Pensions to set out how they will inform private landlords when a tenant has a change of circumstances that affects their housing benefit.

The Federation’s research showed that whereas landlords with experience of housing benefit tenants understood that their tenants required greater levels of support, those landlords who are unfamiliar with the process are less likely to feel confident that their rental income is secure, and are therefore less likely to let to a housing benefit tenant.

Ian Fletcher, Director of Policy at the Federation, said: “We urge DWP to implement alongside Universal Credit, a system to inform private landlords when a tenant has a change of circumstances that affects their housing benefit. This basic step will provide reassurance to a landlord and reduce any confusion regarding delayed payments or applications for alternative payment arrangements.

He added: “The challenges of housing supply are long term issues that will inevitably see the private rented sector continue to be relied upon to house welfare recipients. Universal credit is the most radical change to affect the payment of benefit in several generations and if private landlords do not feel confident they are going to receive rental income they will vote with their feet and not engage with it.”