The importance of referencing Universal Credit tenants
With Universal Credit in the news again this week, at Tenant Referencing UK we thought we’d draw attention to this:
If a council or housing association tenant has one month’s rent arrears it will be paid direct to their landlord
if a private tenant has rent arrears private landlords must wait two months’ for the housing part of UC to be paid directly to them.
How is this fair?!
With just two areas left to introduce it, the Government’s ‘flagship welfare reform’ sees six benefit payouts combined into one monthly payment, where almost 405,000 people have now made a UC claim.
Labour’s work and pensions spokesman said: “Universal Credit is a great idea that unfortunately is running the risk of being stillborn as a result of the cuts that Osborne and Iain Duncan Smith oversaw.”
“It should make work pay for people but unless (new work and pensions secretary Stephen Crabb) reverses the cuts to the work allowance and restores the work incentives it’s going to leave millions of people worse off.”
The irony is now, that landlords are going to be paying for the governments catastrophic failure with Universal Credit with the help of the latest stealth taxes introduced (Capital Gains Tax cuts and the additional 3% Stamp Duty rate), instead of building the homes that our country so desperately needs.
So now that the majority of your tenants are paid their housing benefit directly, rather than it automatically going to you, please be aware that they are fully responsible for paying the benefit directly to you. Even though research carried out at the introduction found that 92% of tenants would prefer their housing benefit paid directly to their landlord …!
Are you worried about your tenants falling into rent arrears because of Universal Credit?
To gain an understanding of the possible cost of this start by adding up eight months rent minimum (it takes most Landlords at least 2 months to decide to evict), add court fees, bailiffs fees, your time, stress and energy. Don’t forget to add in the out of pocket expenses such as damage to the property, removed boilers, copper piping amongst a whole host of other damage that can be done. Environmental health visits and other activities can also delay the process by at least 12 months too.
Which is why tenant referencing is so important from the outset.
Although some landlords think that it is not worth referencing those on benefits; ON THE CONTRARY! Not only does our system provide an in-depth insight into you applicant benefit tenants financial situation via the financial report (pay day loans, etc), but, more importantly, their unique tenant history (uploaded by other landlords) is also included at no extra charge. With these reports you no longer have to rely on what the tenant is telling you, or not telling in some cases.
And this is why proactive landlords get total peace of mind by using rent guarantee insurance.
*WATCH THIS SPACE* New RGI product coming soon for benefit claimants, exclusively at Tenant Referencing UK.
- How do you feel about the Universal Credit scheme?
- Have you stopped taking tenants in receipt of benefits now?
- Are you a tenant in the PRS who’s now in receipt of Universal Credit? How has the new benefits system affected you?
- Please get involved in our live community discussion by clicking here.