12 Oct 2021

Today the Government will go ahead with a planned cut to Universal Credit of £20 per week. The level of welfare support had been increased in light of the impact of the pandemic on household incomes.

With rent arrears at historically high levels, the NRLA’s view is that this cut will significantly worsen the levels of rent debt accrued by tenants across the private rented sector. According to official government figures, almost 1.5m renters across England and Wales could also stand to lose £1,000 as a direct result of today’s announcement.

According to the 2019/20 English Housing Survey, 14.4% of privately rented households in receipt of benefits were behind on rental payments. Over the course of the pandemic, the overall proportion of privately renting households in arrears tripled. Many more households will be forced into a perilous financial position due to the impact of the end of the furlough scheme and today’s cut.

Without urgent reform of the Universal Credit system there is also a strong likelihood that tenants’ credit scores will be damaged – an outcome which will reduce their ability to access other housing in future.

Practical steps to combat the negative effects of this cut, such as ending the five-week wait for a first payment of Universal Credit, must also be prioritised by the Government to bolster landlord confidence in the welfare system.

Responding to today’s changes, Meera Chindooroy, Deputy Policy Director at the National Residential Landlords Association, said:

“During the pandemic we have found that many renters have built high levels of arrears, which they will struggle to pay off in future. With this in mind, today’s cut to Universal Credit is a short-sighted move that will only serve to worsen this ongoing rent debt crisis.

“Most landlords have offered flexibility where tenants have faced the financial impact of the pandemic, but they cannot absorb these losses indefinitely.

“Practical steps to address this problem can and should be taken to ensure those tenants in receipt of benefits can cover their rents. It is our view that not only must the Government end the five-week wait for the first payment of Universal Credit, it should also ensure they can choose to have the housing element of their Universal Credit payments sent directly to their landlord.

“Besides addressing the consequences of this cut to Universal Credit, it is our belief that adopting this new approach will go a long way towards the creation of a fairer, more inclusive private rented sector which works in the interests of both landlords and tenants.”

-Ends-

Notes:

  • The below table provided figures from the Department for Work and Pension’s Stat Xplore website. It shows all those in the private rented sector in receipt of Universal Credit whose UC payment includes support for rental costs. May 2021 is the most recent data the DWP has.
March 2020May 2021% Change
England706,1501,388,849+96.7%
Wales37,78863,597+68.3%
TOTAL FOR ENGLAND AND WALES743,9381,452,446+95.2%

Link to original article

Thanks for reading!

Need to discuss your issue? Confidential Call: 0208 088 0788 now.

Or fill in our contact form here.

Keep up with the latest from Landlord Licensing & Defence…

Subscribe to our YouTube Channel to find all our videos on Regulations, RRO, HMOs and much more! 

Join our private Facebook Group where you’ll find a support network of other landlords and experts as well as case studies and how to avoid council fines.

Follow us on Social Media for the latest in Property and Licensing…

Follow us on Facebook

Follow us on Twitter

Subscribe to receiveall the latest updates on regulation and legislation

Join our newsletter & mailing list to receive the latest news and updates from our experts.

You have Successfully Subscribed!