Almost two-thirds of private landlords with tenants receiving Universal Credit have experienced them falling into rent arrears.

Based on responses from more than 2,200 landlords, the Residential Landlords Association found that 61 per cent of landlords with tenants on UC have seen them in rent arrears. This is up from 27 per cent in 2016. The research found that on average tenants claiming UC and in rent arrears owed almost £2,400, a 49 per cent increase compared to last year. Over half (53 per cent) of landlords with tenants on UC had applied for direct payment to be made to them instead of to the tenant, known as an Alternative Payment Arrangement (APA). Where successful it took, on average, over two months for this to be organised, on top of the two months arrears already accrued.

This has caused arrears to build up substantially. Those landlords that have to wait for two months arrears before they can apply for direct payment are reporting that on average the APA process takes 9.3 weeks. When added to the initial two months arrears accrued, this means that landlords are on average owed four months’ rent before they are successfully awarded direct payment. The RLA is calling for the APA process to be improved as a matter of urgency, particularly before managed migration begins next year and more families and complex cases are moved onto Universal Credit.

One fifth of landlords also reported that their mortgage lender prevented them from renting homes to tenants in receipt of benefits. The RLA is calling for tenants to be able to choose, where it is best for them, to have the housing element of Universal Credit paid directly to the landlord. It is also calling for private landlords to be given more information about a tenant’s claim, such as when they receive payments, where this is in the best interest of the tenant to sustain the tenancy so that suitable rent payment schedules can be arranged. At present, this is provided to social sector landlords, but not to those in the private sector. Formal mechanisms should also be put in place to enable landlords to reclaim rent arrears where UC tenants leave a property owing rent.

RLA Policy Director, David Smith, commented: “Our research shows clearly that further changes are urgently needed to Universal Credit and more work is needed to give landlords the confidence they need to rent to those on Universal Credit.”

By Patrick Mooney, editor