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Universal Credit is Failing Landlords and Tenants

There have been numerous stories in the press detailing how vulnerable tenants are struggling to cope after being switched to Universal Credit. Now, a government survey sheds further light on the problems faced by tenants and landlords.

Data gleaned from freedom of information requests to local authorities and published in the Independent shows that more than 50% of council tenants are now in arrears on their rent payments. This is in stark contrast to only 8% of tenants still claiming Housing Benefit under the old system.

The Citizen’s Advice Bureau backs these claims up. They say that at least 50% of tenants moved on to Universal Credit have fallen behind on their rent or mortgage payments. However, they say this is no different to arrears before Universal Credit was rolled out.

Tenants are Waiting Weeks for their Money

Many tenants in rental housing are struggling to cope with the delays in receiving money when they are moved on to the new system. Too many are unaware they can claim emergency loans to tide them over, something that has been highlighted in many cases. Those that do apply for emergency loans are forced to use the money to pay for essentials, like food and nappies, because they know it could be six weeks or more before their payments arrive.

Margaret Greenwood, shadow welfare secretary says emergency loans are not helping.

“Nobody should be pushed into rent arrears and left at risk of eviction because they have to wait to receive a payment. Offering loans to people who have been pushed into debt as a direct result of flaws in the system is not the answer.”

Ms. Greenwood is calling on the government to hit the pause button on the Universal Credit roll-out, so it can fix the issues.

However, whilst the government acknowledges that many tenants are falling into arrears when they move on to Universal Credit, it says some of this debt is pre-existing and a third of tenants are debt-free after four months.

Debt Charities Helping Vulnerable Tenants

Debt charities would probably disagree, as they are the ones working on the frontline, trying to help desperate tenants struggling to feed their families with no money coming in.

One woman helped by a Christian charity says she was contacted by the council and asked for immediate payment on her £200 rent arrears, even though the council knew her problems has arisen from being moved on to Universal Credit.

In a similar case, a mother of three says she has been evicted twice since being moved on to Universal Credit. She wasn’t in debt prior to this, but now she owes the council more than £1,000 in rent arrears. She despairs of ever being free from debt.

Landlords Refusing to Let to Universal Credit Claimants

This is all having a knock-on effect on landlords. Many landlords are refusing to let properties to tenants claiming universal credit. They don’t want to take a risk on rent arrears, even though it is often not the tenant’s fault. It’s a very real problem in the private rental sector, where letting agents and landlords can be picky about prospective tenants.

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