Details of the new Universal Credit, due to be introduced next year, have been released confirming that the landlord’s right to insist on direct rental payments if a tenant falls into arrears are to be scrapped.
Under the current Housing Benefit system, payments are made direct to tenants who live in private rented accommodation. However, landlords can request that payments be made direct to them if a tenant falls into arrears or is declared vulnerable.
With Universal Credit, the intention is that housing allowance will be paid direct to tenants in all cases, whether they rent privately or live in social housing. The Government’s aim is to encourage claimants to take more responsibility for their finances, managing rent payments as part of their overall household budget.
The Residential Landlords Association is mounting a campaign to oppose the proposals. They argue that there should be a right for landlords to be paid direct payments once there are six weeks arrears. The RLA has raised a number of concerns including an alleged lack of clarity and the risk of higher rent arrears. This will lead to an unwillingness of landlords to house benefit claimants, they say.
Richard Jones, the RLA’s policy director, said “We strongly believe that the Government’s whole approach is flawed and although the objective of helping tenants to manage their financial affairs is in isolation a laudable one, the Government has wholly failed to appreciate the consequences of this.”
The reality is that being nice to landlords is unlikely to win politicians many votes. The RLA may well be right in its assessment that arrears will be higher but – whilst this might be a concern in the social housing sector – the government or the public are unlikely to shed many tears about private landlords having arrears of rent. The government is trying to end the dependency that claiming benefits often brings and giving claimants more control over how they manage their money is a central part of this policy. Tenants who fall into arrears with rent will not go without sanction: their credit record could be affected (see our post on including rent in credit records) and they may ultimately face eviction.