Universal Credit Debate

Universal Credit Debate

15:09 PM, 26th September 2012, About 11 years ago 5

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Universal CreditThe Universal Credit, due to be introduced in October 2013, is a new scheme which aims to simplify the benefits system by combining all in-work benefits( jobseeker’s allowance, tax credits, income support, employment and support allowance) into a single monthly payment rather than combination of a number of benefit payments as is currently the case.

The single Universal Credit payment will be paid directly to the claimant who is then responsible for passing on rent payments to their landlord.

But Graham Kinnear, Managing Director at Landlord Assist, is concerned that the new scheme will leave landlords open to rent arrears and forced to take eviction proceedings against tenants.

He says: “Whilst we accept the rationale that one payment is more straightforward and probably more cost effective to deliver, we are concerned that the provision of one credit will make it impossible for landlords to receive payment for rents directly, even if the tenant falls into arrears. This is because the single payment is used to cover other payments and not solely the rent.

“This concept is particularly worrying given that it could create a further disincentive for landlords to accept tenants in receipt of benefit. There is already a housing crisis, whereby demand is outstripping supply, and this scheme could make the situation a lot worse.”

Stephen Parry, Commercial Director at Landlord Assist adds: “Additionally we are concerned that claimants may struggle to budget for monthly rather than weekly or fortnightly payments, and this will lead to situations where many will spend housing benefit payments at the start of the month on costs other than the rent, leading to increased arrears and evictions.”

Graham Kinnear adds: “Many private landlords feel that the only way to boost provision of suitable accommodation for those in receipt of benefits is for the private and public sector to
work together. If local authorities can permit the payment of the rent direct to the landlord and in return the landlord provides quality, safe accommodation, then we really could turn a corner in terms of social housing provision.

“However, if the Government makes it more difficult for landlords to operate within the housing benefit market then some will leave this area of the market and fewer new entrants will want to get involved. The net result could be a housing crisis worse than the one we currently have.”

What do readers of Property118 think about the Universal credit system?

Landlord Assist provides tenant referencing and tenant eviction services as well as a free advice service on all landlord and tenant matters. They can be contacted on 08707 662288 or via their website www.landlordassist.co.uk

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20:15 PM, 26th September 2012, About 11 years ago

Hi Graham,
I sympathize with, and support, the points that you raise in your article .... but feel a little bit of "de ja vu" .. as we all had similar concerns with the introduction of LHA (paid directly to the tenant) back in April 2008.

Even though it was clear from the start that a lot of benefit money (meant for rent) would be misappropriated by DSS tenants - the Government at that time pressed ahead and .... lots of benefit money was, indeed, misappropriated!

However, the LHA safe-guarding rules were then relaxed so that any tenant deemed "vulnerable" (eg: previous rent arrears due to misappropriation, drink, drugs etc) had their benefit paid directly to the landlord. So, I anticipate that the same thing is going to happen again!

UC will be introduced, money will be misappropriated by the tenants, vulnerability rules will be introduced or relaxed so that benefit is paid directly to the landlord ........

It would seem that the Government never learns!


0:03 AM, 27th September 2012, About 11 years ago

So whilst the UC is misappropriated how will LL pay their mortgage payments whilst they take about 9 months to evict the tenant, during which time a LL will have to pay the mortgage out of his own funds.
Do they have them!?
UC presently will only be paid directly to tenants.
Most UC claimants will not qualify for RGI.
If the mortgages cannot be paid by the LL whilst the tenant is being evicted and not paying rent what will happen to the property?
6 months of missed mortgage payments will mean repossession.
What will be the effects of reposession on LL.
Just think one wrongun LHA/UC tenant could destroy a LL financial situation.
Time to get rid of your LHA claimants and take on tenants who will qualify for RGI otherwise you will be terribly exposed.
More and more tenants are becoming aware of how long it can take to get rid of them.
Sometimes over a year and now we are hearing stories of DJ applying emergency stop orders to evictions.
Very, very worrying.
I have heard of LL having to pay £8000 in court costs plus other associated costs for these stopped evictions.
If you struggle to obtain vacant posession of your own property from a non-rent paying tenant.; doesn't that undermine the fundamental business model of the private residential market!?

16:19 PM, 29th September 2012, About 11 years ago

There's already problems in the pathfinder area's. I think there will be changes before it's rolled out, as aready tenants are spending the money & I think one of the Councils said it was unfortunate that the tenants had direct debits coming out the same day the rent was due. Well, Hello, Wakey Wakey Govt., that's what's been happening to us LHA Landlords for years.
As soon as the Council don't get their rent money & the Council Tax, Govt will; hopefully take notice.
I think that Lord han't got a clue Freud, has even started talking about direct payments to Landlords a bit more.

2:48 AM, 30th September 2012, About 11 years ago

Yeah but I bet he only means RSL's and councils and definitely not PRS LL.
There is no way that govt will allow direct payment to PRS LL and prevent any council from recovering rent going back 6 years if they deem the tenant had a false claim.
One reason why I will never accept direct payment unless in the process of evicting a LHA tenant.
The whole concept of making benefit claimants manage their lives as if they were working, just will not work.
It is an admirable concept for the govt to encourage; but the reality is they have to accept that there are benefit claimants that have to be treated as children as they are not and never will be responsible.
To put a vast chunk of liquid cash at their disposal is just too much for them to cope with.
They will take it out and spend it on everything bar what it should have been spent on.
Even people not on benefit cannot cope, they are all living on their overdrafts and pay-day loans, what hope a benefit claimant!?
LL will just withdraw from the market as they will not tolerate such losses and the inability to evict quickly.
I think most people don't really like the idea of budgeting.
It is really boring and for most people when they actually sit down and work things out, they realise how little they actually have after all normal expenditure.
This is a reality most people don't wish to recognise.
So the ostrich mentality pervades society in general.
I am afraid it is really not just benefit claimants who are incapbable of managing their circumstances.
Show me anyone who says they have no money and I will show you someone who goes out drinking, has the latest Apple iphone. the latest clothes, the latest ipad, the latest flat screen tv, full sky packages, they smoke and probably take drugs at the weekend, has decent food., eats out regularly, goes on holiday regularly.
Take all these things away and if then they say they have no money then i might believe them!?
Benefit claimants tend to do all these things as everything is paid for and they have clear disposable income.
As a lowly educated person, which are the vast majority of benefit claimants ,you can have a nice lifestyle on benefit.
Given the chance to have large sums of money, they will spend it on things that is not intended for.
After all they know that they will never be made homeless, the council will always house them, which is why these claimants just stick 2 fingers up at the system knowing the system WILL come along and bail them out every time.
This will then cost fortunes for councils in TA until they can rehouse them in housing that doesn't exist!!!!

16:05 PM, 4th October 2012, About 11 years ago

Are this Govenrment totaly deaf, daft or jsut palne stupid as a Lettings Agent, I deal with people who spend thier rent money and say we will pay it back £1.50 a week no interest then move and do all over againm in my birds name, for GODS SAKE GET REAL, get you head out the sand and your finger out your a--e and take a look at teh real work I can come and sort this lot out in month with better ideas than this flippin let have. every one go take people empowerment and stick. it, this does not apply to all people on the DSS etc just all of those who know how to play the system adn some of htem shoudl be in the premier League of taking the mick, this is me being polite by theway for eg, a tenant calls my office cant renew my tenancy as I will only get £500 per week as of next October so need to go on a periodic apply for a council house as 4 bed with them is only £500pcm, that will leave me £1,500 per month to spend, ha ha ha ha ha oh yeah and if the Landlords serves Section (21) on me I will get a Council House any way, he is in a win win situationor he can always spend it on Christmas presents and a holdiay for him his wife & six kids. He can pay it all in one month. I am so sorry to rant but my blood is boiling, I would love to meet Cameron and take him on I am writing to him with more or the less the same as I have put in thsi, oh yes all you hard working people out there-- Good Luck with saving or you can justgive it the next doley you see.

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