Confirmed: Universal Credit ends direct payment of housing benefit to landlords.
Details of the Government’s new procedures for the payment of Universal Credit were released on Friday 22nd June, here and here, which confirm that the landlord’s right to insist on direct rent payments if a tenant is in arrears will be abolished.
When the Universal Credit system goes live, in October 2013, payments will be made directly to tenants and it will be up to them to pay their rent or not; applying right across the board to local authority tenants, housing association tenants and tenants in the private rented sector.
This marks a significant change from the current system in which many LHA tenants choose to have their housing benefit paid directly to their landlord.
Since the first announcement about the introduction of welfare reform via Universal Credit, in October 2010, Landlord Referencing Services has been extremely sceptical and worried about the ramifications for not only landlords and tenants but also the country’s economy; if tenants have no choice of direct rent payment to their property provider.
At Landlord Referencing we believe tenants should have the right to decide if their rents are paid directly to their landlord – to help those on low incomes avoid debt and arrears.
Relevant Landlord Referencing news blogs:
Universal Credit Explained in Full
Not only do we predict that it will significantly increase:
- rent arrears
it also threatens the delivery of affordable housing in high-value areas.
As well as using Credit Unions, Associations and/or Accreditations, we believe that the only true way to be able to reduce the amount of tenants in arrears and at the same time protect our good tenants from bad neighbours is for all UK landlords to network with one another.
“By giving people the power to share, we’re making the world more transparent.” Mark Zuckerberg, Founder & CEO of Facebook.
Click to find out how Lifestyle Network Referencing benefits all UK landlords and letting agents.