The introduction of Universal Credit is causing tenants to fall behind on their rent, according to research from the Residential Landlords Association (RLA).
More than half (54 percent) of private landlords who have let to tenants in receipt of Universal Credit in the last 12 months had seen them fall into arrears.
The majority of these landlords (82 percent) reported that the rent arrears began after either a new claim for or migration onto Universal Credit.
Just under one third of landlords (32 percent) made an Alternative Payment Arrangement (APA) application in the past 12 months. On average these landlords reported the process took nearly 8 and a half weeks for direct payment to be arranged.
The study also explored the reasons why landlords currently do not let to Universal Credit tenants. The main reasons identified in this research were due to concerns of financial risk (61 percent of landlords) and perceptions of being a higher risk for rent arrears (58 percent).
There is an increasing likelihood that these rental arrears could have an impact on the tenants’ credit score, as credit reference agencies begin to include rental data in their bureaus.
As part of the report, the RLA is calling on the government to do more to prevent rent arrears occurring in the first place including:
David Smith, policy director for the RLA, said: “Today’s research shows the stark challenges the government still has in ensuring Universal Credit works for tenants and landlords.
“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 that they need that tenants being on Universal Credit does not pose a financial risk that they are unable to shoulder. Without such changes, benefit claimants will struggle to find the homes to rent they need.”