Homelessness Poses Increasing Risk from Universal Credit

Homelessness is becoming an increasing risk for tenants on benefits, as a new report has revealed that 16 per cent of landlords would refuse to let to tenants in receipt of Universal Credit.

Thousands of landlords are refusing to consider the rental applications of those entitled to Universal Credit, according to research from tenant referencing and insurance agency Landlord Secure. This is in spite of various estimates that suggest 37 per cent of Universal Credit claimants are in fact in employment.

Whilst last week’s Budget attempted to rectify the situation somewhat, it was generally seen as a futile and ineffective attempt to repair the issues that could lead to homelessness from Universal Credit.

The research found that a further one in five landlords would reject an applicant who requires housing benefit support.

Managing director at Landlord Secure, Steve Burrows, explained: ‘Universal Credit was introduced to help the poorest in society out of poverty, but this report 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 waiting time for first payments. 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.’

The research suggests that the sector is in need of reform in order to rectify this issue. Generally, landlords are not able to access a potential tenant’s financial history, and therefore opt to reject tenants due to a presumption based on their receipt of benefits. In fact, the tenant may be entirely willing to pay the rent. However, this may change given the impending removal of letting agent fees, which landlords may attempt to offset with rent rises.

Mr Burrows continued: ‘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.’