Mechanism Needed to Reclaim Universal Credit Rent Arrears Say Landlords

Landlords have called upon the Government to install a mechanism that will enable them to reclaim rent arrears accumulated by tenants on Universal Credit who have since moved out of their property.

Research conducted by the Residential Landlords Association (RLA) has revealed that landlords are seeking ways to reclaim lost rental payments. This comes alongside the fact that 36 per cent of private landlords now have increasing confidence to rent to tenants on Universal Credit as result of changes recently announced in the Budget.

In last month’s Autumn Budget, chancellor Philip Hammond announced a £1.5 billion support package to help address concerns raised about the delivery of the controversial Universal Credit programme. Furthermore, claimants of Universal Credit will no longer be forced to wait seven days before being entitled to a payment, according to new measures. Housing benefit will continue to be paid two weeks after a Universal Credit claim is made.

Further changes were made to the advance system, meaning that households can now access a month’s payment within five days of applying. The repayment period for this will be extended from six to 12 months.

Despite this, the survey found that 73 per cent of landlords still lack confidence that they are able to recover arrears that could occur when tenants move to Universal Credit. This is likely due to months of confusion as the system was rolled out, leading to a lack of faith across the sector. A mechanism to reclaim rent arrears is needed to instil confidence in the programme. 

Following the debate of the new benefits system by MPs, the RLA is calling for action to ensure that landlords are able to reclaim any rent arrears from tenants claiming Universal Credit who then move out of their property.

RLA’s vice chair, Chris Town, explained: ‘Ministers have clearly been listening to concerns and we welcome their reforms to Universal Credit which have given landlords more confidence in the system. That said, there are still problems around rent arrears and recent tax hikes mean that landlords are less able to cope with difficulties in collecting rents. Without further reforms we cannot say ‘job done’ on Universal Credit.’