Direct payment of Universal Credit to landlords – Online system being developed

by Property118.com News Team

9:16 AM, 12th January 2019
About 2 years ago

Direct payment of Universal Credit to landlords – Online system being developed

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Direct payment of Universal Credit to landlords – Online system being developed

“One third of UC claimants in social rented housing have their rent paid directly to their landlord. But in the private sector, that number is only 5%.

“People in the private rented sector already face a far higher risk of losing their tenancy, and I know from talking to claimants and landlords that the current system isn’t working for some of them.

“So we need to make it easier for tenants in the private sector to find and keep a good home, by giving landlords greater certainty that their rent will be paid.

Therefore, I have asked the Department to build an online system for private landlords, so they can request (where necessary) for their tenant’s rent to be paid directly to them. And I will consider what else we can do, because I am determined to help keep people in their homes.”

The above is a section of  a speech given yesterday by Amber Rudd, Secretary of State for Work and Pensions, on changes to the roll out of Universal Credit. Click here to read the full speech on the government website.

“So here’s what’s going to change:

  • a more considered approach, so we can provide a better service for everyone moving onto Universal Credit from the old system
  • greater flexibility on payments, so the benefit fulfils its promise to adapt to individual needs and circumstances
  • more support for women: moving payments to the main carer, and making childcare payments more accessible
  • and every child born before April 2017 will now be supported by Universal Credit”

Under the current system 80% of landlords are reluctant to take the risk of renting to Universal Credit tenants with the average amount owed by Universal Credit tenants in rent arrears almost doubling in the last year from £1,600.88  to £2,390.19

Secretary of state for housing, communities and local government, James Brokenshire, said: “The measures announced today will ensure that landlords can receive rent from those on Universal Credit directly into their accounts. This important change will help strengthen the choices and opportunities available for those on Universal Credit to secure the homes they and their families need.”

NLA chief executive, Richard Lambert, responded to the planned changes: “Landlords have long supported the principles underlying Universal Credit, but have not been convinced by any of its practical implementations. Amber Rudd’s fresh approach is welcome, but needs to go much further if she wants Universal Credit to be truly effective and compassionate.

“Payments have fallen well behind rents across the country and will continue to do so while the freeze remains in place. In committing to end the freeze in 2020, all she’s saying is once the holes a bit deeper, I’ll stop digging.”

RLA Vice Chair, Chris Town, commented: “Our most recent research has shown that 61 per cent of landlords with tenants on Universal Credit have seen them go into rent arrears, up from 27 per cent in 2016.

“Improving, and speeding up, the process by which payments can be made directly to the landlord has been a central part of the RLA’s campaign on Universal Credit. Anything that helps this will give landlords much greater confidence in the system and ensure tenants have greater security in the knowledge that their rent payments will be met.”

Comments

Gunga Din

16:30 PM, 14th January 2019
About 2 years ago

For me the solution would be for the council to lease the property, pay me an amount monthly, regardless, and take on all the landlordly responsibilities, risks and expenses. I haven't looked into it, but I expect it would be difficult to detach myself from being the landlord from a legal standpoint.

David Price

17:03 PM, 14th January 2019
About 2 years ago

Reply to the comment left by Gunga Din at 14/01/2019 - 16:30Should not be too difficult, you lease the property to a third party, in this case the local authority and they the sublet to the tenants with an AST. Make sure that the tenancy continues after the fixed period as a contractual periodic or you will become responsible for the council tax if the property is empty.
The problem is getting the LA to lease the property in the first place for they do not want to take the risk, far preferring the landlord to take all the risk.

dismayed landlord

17:18 PM, 14th January 2019
About 2 years ago

Lease it to a company who specialise in providing accommodation to local authorities. They will put anyone in them. Often over crowded. Temporary is a bit unquantifiable. Last ones I did this way the 'clients' were in temporary accommodation for 5 years. I was paid slightly above the normal going rate. The company charged 4 -5 times that rate as they were 'managing' it. The deal is you get the property back in the condition you handed it over. First, they do not manage it. Second, they fail to control their 'clients'. Three, you get it back requiring substantial works. And their reply is 'take us to the small claims court. All agro -all the time. Who pays for these higher rental rates. The tax payer. PSL and every council tax payer. But PSL are blamed for exploiting hard up councils. I took mine back from them when I saw the conditions they had the tenants living in. Overcrowded. Poorly repaired. Never again. but then never again council tenants or anyone with a IVA or CCJ. not worth it.

AJ

18:39 PM, 14th January 2019
About 2 years ago

This is going to get worse, more landlords are leaving, so more social is required. What will happen if we are forced to rent to HB tenants? In Ireland they were considering taking serviced accommodation style property as there was more available there, than there was to rent.

reader

20:14 PM, 14th January 2019
About 2 years ago

Although it is helpful to have an efficient and new channel of communication the most important aspect needs to be addressed, that is the factors used by the government to approve an application for benefit direct.

Devon Landlord

10:35 AM, 15th January 2019
About 2 years ago

I agree with Reader. What will be the criteria for awarding direct payments. I bet that there will be so much red tape involved and no guarantee of continuity of payments if the tenant screws up their benefit claim as often happens now. If the payment was made as a tripartite agreement between tenant, landlord and HMRC with the HMRC unable to stop payments without proof of vacation and the say so of the landlord, then it might work. Do you see that happening? The slippery bureaucrats who write these agreements and have no real interest in the lives of the people involved don't care about the fall out when things go wrong. So my advice is to keep away from UC tenants if you can and if not make sure that you check and check again on their suitability and do as some of the most efficient landlords do, visit them in their current property first to see what yours might look like if they get in! And if you can't, then don't let to them!!!

Smithy @hotmail

11:18 AM, 19th January 2019
About 2 years ago

I had a nice young couple as tenants - he worked and she looked after their two young children. They paid me the rent in cash each week. What I didn't know was that she was claiming benefits as a single mum. I knew she/they were getting some benefits and assumed that it was a top-up of some sort. She was caught by the Council Fraud Team - taken to Court for fraud - £27,000. Suspended sentence and Community Payback. If I had been receiving her Housing Benefit direct, they would have been all over me like a rash.

Another tenant - where the Council was paying me direct. I didn't know he had moved out until the Council cancelled the HB payments. When I queried it, they said he had moved and applied for HB at a new address! He hadn't bothered to let me know. They said I should have kept a closer watch on him - I challenged them because - by chance - I had visited only the previous Saturday and he was still there. They cancelled the refund request.

Another tenant - young couple - Council insisted on paying me direct (they must have known something). I knew he was working full time. I phoned the Council. I emailed the Council and I wrote them a letter to say he was working. I did not want the Council coming back to me later and saying the couple were not entitled. Apparently the couple tried to get the HB paid directly to themselves and not me - which the Council refused.

I don't mind benefit tenants but it's not for the unwary.

Ela

11:44 AM, 19th January 2019
About 2 years ago

Reply to the comment left by Devon Landlord at 15/01/2019 - 10:35
I will never let any of my properties to HB ever again. Not all the same but this particular lowlife family whom makes living out using the councils to get in to free accommodation on landlords expense tainted it for all. I was told that they used one local authorities to get 8 months free housing on landlords expense then gone register with the neigboring council to get another victim to defraud who is myself. The council whim introduced this filth to me not accepting any responsibility and left me to deal with it. They sit in their offices and enjoy their safe jobs paid by tax payers like myself. Shocking that these fraudsters are allowed to do this. No amount of ccj would matter to them. Their life motto is live on benefits and steal from people to finance their dirty lifestyles. The law allows them to do it. I served a section 8 notice. She paid no money since she moved in 2,5 months ago. I can apply to the court end of this month and was told she can stay up to 5 more months at my expense and keeping the hb in her pocket with all other benefits she gets. Plus I am expecting a damage property back if she is nice enough to let me know when she moves out if she moves out before the bailiffs.

AJR

15:15 PM, 21st January 2019
About 2 years ago

Amber Rudd’s very wise reversal on UC is way too little way too late. Colossal damage has been done to landlords confidence in respect of housing tenants dependant on the benefits system.
The whole system is corrupted, exploited, and structured to legalise theft from landlords.
Unless and until Gov understand that I provide a good housing service at the best rates I can, and I expect to be paid fairly for it and consistently with no if, buts, or cons, I will never accept any tenant on benefits again. Would rather sell up and leave.

Devon Landlord

12:30 PM, 22nd January 2019
About 2 years ago

Reply to the comment left by Anthony Richard at 21/01/2019 - 15:15
It is not my policy to let to HB (UC) tenants but I do recognise that many are excellent tenants some of whom do have temporary difficulties and need UC support. However, it is the serial abusers who we need to tackle, identify and prosecute as some of them landlord hop, causing enormous financial and emotional grief in their path. There needs to be a system where these people/criminals are named and shamed and then left out in the cold. They need to be taught that actions have consequences and you can't get away with bad stuff all your life. The sad thing is that the soft liberal under-belly that make our wet rules seem to have too much power and influence in our communities and even at the highest levels.

So Amber Rudd, do us all a favour. Make direct payment compulsory unless the tenant can prove otherwise and let's start sorting out the eviction process so that it is quick, simple and just. Then the PRS may have more respect and tenants understand the consequences if they fail to meet their financial obligations and tenancy responsibilities.

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