Headlines: May 15th, 2014

Landlords blame the steep rise in repossessions on changes in Government policy and are worried that the radical changes that will follow the introduction of Universal Credit will bring a threat to the rental market.

The British Property Federation believes that that the steep rise in landlord repossession claims to 47,220 in the first three months of this year, which is the the highest quarterly figure in ten years, results from changes in Government policy.

The Federation said that the constantly shifting reform of welfare policy has impacted heavily on the rented sector, and is concerned the national roll out of Universal Credit has the potential to increase this.

It has urged the Government do its utmost to ensure that its flagship welfare policy, Universal Credit, does not further increase pressure on housing benefit claimants in the private rented sector.

The overwhelming majority of these cases are from the social sector where welfare policies such as the ‘spare room subsidy’ have increased pressure on tenancies. The Federation is concerned that following changes to the delivery of the Local Housing Allowance and the imminent shift to Universal Credit, private landlords and tenants could be left uncertain of how policy changes will impact on them, and have a similar impact on tenancies in Private Rented Sector which houses 25% of housing benefit claimants.

The Federation would like to see DWP alleviate these concerns by setting out how they will proactively share housing benefit information with landlords in order that they can offer greater support to their tenants during the transition to Universal Credit. Landlords need to feel that their rental income is more secure and by making the landlord aware of a tenant’s change of circumstances they can work together to maintain the tenancy.

Ian Fletcher, Director of Policy at the Federation, commented: “Government has to recognise the vital role played by landlords in helping customers maintain their tenancies. Ensuing landlords are able to access reliable information on how successfully claimants are adjusting to Universal Credit will increase the probability of long and successful tenancies.

“The repossession statistics from the Ministry of Justice show quite clearly the impact new policies can have on the rental market, while we support the ambitions of Universal Credit, the pilot schemes have shown that the policy has the potential to impact hardest on the most vulnerable tenants.”