Direct payment of Universal Credit to landlords – Online system being developed

“One third of UC claimants in social rented housing have their rent paid directly to their landlord. But in the private sector, that number is only 5%.

“People in the private rented sector already face a far higher risk of losing their tenancy, and I know from talking to claimants and landlords that the current system isn’t working for some of them.

“So we need to make it easier for tenants in the private sector to find and keep a good home, by giving landlords greater certainty that their rent will be paid.

“Therefore, I have asked the Department to build an online system for private landlords, so they can request (where necessary) for their tenant’s rent to be paid directly to them. And I will consider what else we can do, because I am determined to help keep people in their homes.”

The above is a section of  a speech given yesterday by Amber Rudd, Secretary of State for Work and Pensions, on changes to the roll out of Universal Credit. Click here to read the full speech on the government website.

“So here’s what’s going to change:

• a more considered approach, so we can provide a better service for everyone moving onto Universal Credit from the old system
• greater flexibility on payments, so the benefit fulfils its promise to adapt to individual needs and circumstances
• more support for women: moving payments to the main carer, and making childcare payments more accessible
• and every child born before April 2017 will now be supported by Universal Credit”

Under the current system 80% of landlords are reluctant to take the risk of renting to Universal Credit tenants with the average amount owed by Universal Credit tenants in rent arrears almost doubling in the last year from £1,600.88  to £2,390.19

Secretary of state for housing, communities and local government, James Brokenshire, said: “The measures announced today will ensure that landlords can receive rent from those on Universal Credit directly into their accounts. This important change will help strengthen the choices and opportunities available for those on Universal Credit to secure the homes they and their families need.”

NLA chief executive, Richard Lambert, responded to the planned changes: “Landlords have long supported the principles underlying Universal Credit, but have not been convinced by any of its practical implementations. Amber Rudd’s fresh approach is welcome, but needs to go much further if she wants Universal Credit to be truly effective and compassionate.

“Payments have fallen well behind rents across the country and will continue to do so while the freeze remains in place. In committing to end the freeze in 2020, all she’s saying is once the holes a bit deeper, I’ll stop digging.”

RLA Vice Chair, Chris Town, commented: “Our most recent research has shown that 61 per cent of landlords with tenants on Universal Credit have seen them go into rent arrears, up from 27 per cent in 2016.

“Improving, and speeding up, the process by which payments can be made directly to the landlord has been a central part of the RLA’s campaign on Universal Credit. Anything that helps this will give landlords much greater confidence in the system and ensure tenants have greater security in the knowledge that their rent payments will be met.”

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