Landlords are being warned to brace themselves for the rollout of flagship welfare reforms – with almost four in ten landlords suffering from unpaid rent following the introduction of Universal Credit.
Ajay Jagota, who campaigns for reform of Britain’s tenancy deposit system, said: “Universal credit is the latest threat to landlords who are already losing out to tax changes and the coming ban on letting agents fees.
Average deposits in my native North East are in the region of £550 but the average rent arrears owed by tenants already on Universal Credit is more than twice that, and figures suggest that close to half of landlords with tenants receiving Universal Credit will suffer from unpaid rent.
These costs come before associated expenses of severe arrears like legal or bailiff fees, and don’t include cleaning costs or property damage. Landlords should consider how much protection traditional tenancy deposits are going to give them if soaring rent arrears come hand in hand with the rollout of Universal Credit
Everyone agrees that the benefit system need to be simplified, but it doesn’t seem to be too controversial to suggest the wholesale introduction of Universal Credit be slowed down in light of results we’ve seen in the pilot programmes.
Ironing out kinks now – such as cutting the seven-week waiting period before claimants can receive Universal Credit, or making it simpler for payments to be made straight to letting agents or landlords in the event of arrears could make a huge difference to the long term success and sustainability of Universal Credit”.