Local authorities across the country are desperately trying to encourage more private landlords to accept tenants on housing benefit to help alleviate the growing housing crisis, but a new poll offers an indication as to why some buy-to-let investors still refuse to accept tenants on housing benefit.
A YouGov poll of private landlords across England and Wales for the National Residential Landlords Association (NRLA) shows that 9% of private landlords renting to Universal Credit claimants have experienced at least one tenant having difficulties paying their rent due to benefit cuts.
The survey, conducted after the government in October cut Universal Credit by £20 a week following a temporary increase in response to the pandemic, shows the extent of the cut’s impact on tenants in receipt of benefits.
According to official statistics, of those private rented households in England and Wales receiving support through Universal Credit to pay their rent, more than half – 55% – had a gap between the support they received and their rent payments.
The NRLA is warning that this will only become worse as a result of the government’s decision last year to freeze in cash terms housing cost support. As a consequence, in the years ahead the level of benefit support available will be able to cover the rent on ever fewer numbers of properties.
As many households face a cost-of-living crisis, the NRLA argues that a benefits system which property supports tenants is of critical importance. To that end it is calling on the government to reverse its damaging decision to freeze the Local Housing Allowance rate and ensure it properly reflects market rents.
Ben Beadle, chief executive of the NRLA, said: “Benefit payments are failing to give tenants or landlords confidence that they will be able to cover rents. This basic problem lies at the heart of a broken system in desperate need of reform.
“With households facing a cost-of-living squeeze, it is vital that the benefits system gives the protection that tenants deserve. That is why the Chancellor needs to end the housing benefit freeze as a matter of urgency. Without this many tenants and landlords face an uncertain future about how to keep tenancies going.”
Comments (5)
This is not the first time this topic has come up. Many tenants who rely on benefits to meet rental payments are unreliable payers.
Woodentop is correct. The PRS is not the social housing sector. Social rents are typically 60% of market PRS rents and affordable rents are 80% of market rent. These rents are subsidised nobody subsidises the PRS. Unfortunately housing benefit reflects these subsidised rates rather than the real rates so in most cases will not cover all of a PRS rent.
Then the benefit is paid by default to the tenants. These are people who are at the lower end of the income scale. They have no cash buffer to handle everyday emergencies that crop up out of the blue like car repairs or a broken fridge. When push comes to shove using the benefit money to sort these things out rather than using it for rent is a natural temptation and rent arrears result.
So to sort things out housing benefit must reflect the actual cost of the housing being provided and the benefit should be for housing costs only and the only way to ensure this is to pay the rent directly to the housing provider be it a private landlord or a social provider.
After years of telling supporting tenants in rent arrears by telling them to sit tight until evicted by bailiffs, suddenly councils want to be landlords’ best friends? I have dealt with tenants recommended by one council or another over the last 30 years, If I remember correctly a total of five occasions and each time it was after pressure by a landlord. Each time it went wrong and each council backed the tenant every time.
You are correct, Councils are supposed to act when a tenant is under threat of losing their home for whatever reason. This is the moment that notice is served not the time months down the line when the bailiffs turn up. I believe this common practice is not lawful. Councils do this to push the problem down the line in the hope that it will go away as they don’t have properties to provide people with and they are certainly not happy to take on anybody with a history of rent arrears in the PRS.
First paragraph says it all.
PRS is not social housing. We have decades of experience with both sectors of tenants. 90% of our time is taken up sorting out attitude problems with tenants on benefits. Affordability used to be priority … not anymore.
We all know the industry is being used to fill the gap in social housing and many a landlord is more than happy to take these tenants in …. until they hit arrears which they should never do considering many of them receive housing benefit of some kind to pay it! These landlords seem to think its safe income. Agents time/income is gobbled up by sorting out the bad eggs.
If I, the biggest Benefit Landlord in Nottingham is no longer taking Benefit tenants cause of the UC system, then society has a problem.
So easy to solve though. But Govt don’t do solve, the just keep swapping the Ministers roles so no MP is held accountable nor in the role long enough to learn it like me that’s had many same tenants over 24 years, so we do know what it takes to keep people safe in their homes.