Tenants are becoming increasingly confused over the Government’s Universal Credit system, reveals recent research from the National Landlords Association (NLA).
Half of respondents surveyed by the NLA say that although they are aware that existing benefits will be replaced by Universal Credit, they do not fully understand what it means.1 Additionally, one in five (21%) say that they are completely unaware of the changes.1 Only three in ten (30%) say that they are aware and know what to expect.1
The study also revealed that at present, three in ten (30%) of tenants receive Housing Benefit support.1
Universal Credit was introduced in April 2013, and replaces six existing benefits with one single monthly payment. With recent reductions to the benefit system, these changes have caused rising worry for landlords who rent to Housing Benefit tenants, who now fear that rent will not be paid on time.
Despite this, the findings also show that over a quarter (28%) of tenants who currently receive Housing Benefit would rather their benefit be paid directly to their landlord, to avoid falling into rental arrears.1
Chairman of the NLA, Carolyn Uphill, says: “Benefit payments simply haven’t kept up with rents over the past few years, as the Universal Credit programme has progressed and cuts to welfare payments have been made. This has led to concern among many landlords that tenants will fall behind on rent as their finances become increasingly squeezed.
“If tenants don’t fully understand what Universal Credit is, or haven’t even heard of it, more and more landlords will lose confidence that letting to this market is financially viable, especially with the high demand and availability from other types of tenants.
“Our findings show a significant number of tenants would prefer their housing support to be paid directly to their landlord. If this was an option from the beginning of the tenancy, it would avoid the build-up of arrears in the first place, give landlords the confidence that rent would be paid on time, and lead to fewer tenancies ending prematurely.”1