Universal Credit will put Landlords at Risk says Industry Expert

18 July 2012 Categories: News

Universal Credit will put Landlords at Risk says Industry Expert

Universal Credit, which is to replace housing benefit in 2013, will put thousands of social and private sector landlords at financial risk says industry expert, Peter Girlings, of Girlings Retirement Rentals. Like Local Housing Allowance, the new benefit will be paid directly to tenants who will then be responsible for paying their rent with it, but according to Girlings the financial constraints currently facing a growing number of tenants in both sectors will mean the proportion of rental arrears will almost definitely increase.

The LHA cuts of 2012 saw 58% of private landlords admit to wanting fewer benefit tenants in their properties and the new universal credit scheme is set to make the problem worse. Writing on his blog Mr Girlings recently wrote, “Many social tenants do not have bank accounts and according to a report from Inside Housing last year, nine out of 10 of tenants would prefer their housing benefit paid directly to the landlords.

“This government’s laissez-faire approach and view ‘that it’s up to them to pay their rent’ is totally naïve. It will see many tenants spiral into debt and landlords left to foot the bill. In the first quarter of this year, there has been a 16% rise in homelessness and I fear these housing benefit changes will only exacerbate this problem.”

He then goes on to ask the question, “What incentive do landlords have to house social housing tenants when they are clearly facing a huge financial risk?”