Landlords pushed to serve notice on those with Universal Credit
A large number of new claims would have motivated the landlords to take this action.
Landlords with tenants in receipt of Universal Credit are struggling to set up Alternative Payment Arrangements because the online Universal Credit landlord portal is closed to new claimants.
This is believed to be because the Department of Work and Pensions (DWP) is overwhelmed by the number of new claims, but landlords say it is forcing them to consider serving a notice to their tenants.
The research comes from Caridon Landlord Solutions, which provides expert advice on Universal Credit and Home Benefit to private owners, rental agencies, and housing associations.
Sherrelle Collman, Managing Director of Caridon Landlord Solutions, said: “This is an extremely difficult situation.”
“The pressure on DWP due to the increase in claimants is enormous, but when tenants have difficulty meeting their rent payments, we know that APAs not only have a significant impact on limiting arrears but also help maintain the lease.”
“The government wants landlords to support tenants, but there has to be a middle ground.”
“The owners we’re talking to say they come and go on the phone, only to have a case manager call them, and then they won’t hear anything.”
“We have seen a 20% increase in landlords who wanted our help in setting up APA, and they were all at a point where they were considering notifying their tenants because they had no other option.”
Last year, the Department of Work and Pensions (DWP) launched an online landlord portal system to allow landlords in the social rental sector to verify rent and submit managed payment requests online, rather than by email.
This meant that if a tenant had difficulty meeting rent payments, the landlord could request to establish an Alternative Payment Agreement (APA), which means that the housing element of the Universal Tenant Credit payment would be paid directly to the owner. For many tenants, this is an easier way to help them budget.
However, since the start of the COVID-19 pandemic, the number of people claiming Universal Credit in the UK has risen from 2.9 million in February 2020 to 5.9 in January 2021.
This could generate a new confrontation between landlords and tenants.
Many of these people will be tenants who previously signed up for private leases based on their income at the time, but due to COVID-19, they now face changes to their employment status and find that Universal Credit doesn’t cover their rent.
Paul Shamplina, the founder of Landlord Action, said: “Universal Credit faces strong criticism from landlords and tenants at best.”
“If landlords now face another barrier to accessing direct payments, it is inevitable that many more landlords will be encouraged to notify tenants that they receive Universal Credit, which goes against the government’s intentions.”
“The government needs to provide more resources to facilitate the incorporation and administration of the Universal Credit system so that owners and tenants can work together.”
“Many landlords with tenants who have suddenly had to start claiming the Universal Credit know that their tenants cannot meet their previous rental payments, but if part of it is assigned to the landlord, then that provides a temporary solution for both parties, which helps to keep the lease going longer.”
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