Studies have found that universal credit is still causing many tenants to fall into rent arrears.
According to the Independent, if your tenant claims universal credit, they are six times more likely to fall into arrears with their rent than other benefit claimants.
Research by the Residential Landlords Association also found that 54% of landlords had seen tenants that claim universal credit fall into arrears in the last year.
These figures haven’t changed despite the government introducing several reforms in 2018 to try to address problems with the benefit system.
Universal credit was introduced to merge together six different benefits, including housing benefit, into just one payment. However, research by the RLA has found that 68% of landlords believe that since its introduction there has been a shortfall in the cost of rent and the amount of benefit being paid.
Some claimants of universal credit are also being left waiting five weeks to receive the benefit. Research by Citizens’ Advice has found that during this time, 60% of the people they helped had taken out advances.
Landlords facing cashflow problems caused by tenants falling into rent arrears are then being forced to begin eviction processes against those tenants who have spiralled into debt and are unable to pay their rent.
David Smith from the Residential Landlords Association said: “The system only provides extra support once tenants are in rent arrears. Instead, more should be done to prevent tenants falling behind with their rent in the first place.
“Only then will landlords have the confidence they need that tenants being on universal credit does not pose a financial risk they are unable to shoulder.”
For help and advice dealing with tenants who have fallen into rent arrears, get in touch with our team of experts here at Debt Squared by calling 0800 002 904.