Member Article

Rent arrears and evictions double under Universal Credit

Flagship benefits reforms have seen evictions and rent arrears DOUBLE – meaning more headaches for landlords and letting agents.

Figures from the BBC’s Panorama show tenants claiming Universal Credit have more than double the rent arrears of those who have yet to move to the new benefit system.

A survey of Universal Credit claimants in every local authority area where the changes have been implemented shows they owe their landlords £662.56 on average, compared with £262.50 for those on traditional housing benefits.

The figures also indicate that evictions have risen by 55% in just one year in areas when Universal Credit has been implemented.

Universal Credit combines six major working-age benefits - including job seeker’s allowance and housing benefit - into one payment, made under most circumstances to the claimant rather than their landlord.

The Citizen’s Advice Bureau last month reported that the number of renters seeking advice from them relating to rent arrears has risen by 47% since the rollout of Universal Credit began.

Ajay Jagota, Managing Director and Founder of zero deposit rent provider Dlighted responded to the figures.

He said: “There’s a lot to be said for Universal Credit’s intention of making our benefits system simple and fairer, but there’s no getting away from the fact that its implementation is yet another thing that landlords and letting agents alike have to come to terms with.

“The deposit protection industry tells us that old-fashioned tenancy deposits are the only way to keep yourself safe from rent arrears – but in reality they only cover you for a month of rent arrears. What happens if you’re owed two months rent? Or three months?

“All the evidence suggests that there is a strong link between Universal Credit and rent arrears, and if deposits won’t protect you if your income is hit when Universal Credit arrives in your area.

“Deposit free renting is something which could be a real benefit to landlords and letting agents who find themselves faced with rocketing arrears following the rollout of Universal Credit in their area, offering them hundreds of thousands of pounds of protection against unpaid rent, property damage and legal fees, while also making it easier and quicker to find new tenants if eviction becomes unavoidable.”

This was posted in Bdaily's Members' News section by John Hart .