William Eichler 23 August 2019

Universal Credit driving tenants into rent arrears, study says

Universal Credit is causing tenants to fall behind in their rent, new research from a group representing landlords has revealed.

Research from the Residential Landlords Association (RLA) has found that 54% of landlords with UC claiming tenants had experienced these tenants going into arrears over the past year.

The majority of these landlords (82%) reported that the rent arrears began after either a new claim for or migration onto the new welfare system.

Universal Credit is the Government’s flagship welfare reform which rolls six benefit payments into one. It has been criticised for delaying payments to claimants.

The RLA’s report found that 61% of landlords were concerned about the financial risk of renting to UC claimants and 58% said they viewed these claimants as a higher risk for rent arrears.

A survey of residents’ experiences of UC, published in June by the housing association The Riverside Group, found that more than 90% of claimants were waiting for more than four weeks for their UC payment with 43% waiting more than six weeks.

In total, four-fifths of claimants (81%) said the wait for their first payment had caused them financial hardship with more than three-quarters (78%) saying they had to rely on loans.

The Riverside Group calculated that once UC had been rolled out to the estimated seven million users who will be claiming it by 2023, around three million more people will also see an increase in their debt.

The chair of the Work and Pensions Committee, Frank Field MP, recently said that Universal Credit should ‘come with a health warning’ – a comment rejected by a spokesperson for the Department for Work and Pensions.

'Universal Credit helps people into work faster than the old system and provides targeted support,’ the spokesperson said.

'Around one million disabled households will gain an average of £100 more a month, and changes to work allowances mean 2.4 million households will be up to £630 per year better off.'

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