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Universal Credit responsible for rising rent arrears

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The system of Universal Credit welfare benefits is being held responsible for a growing number of private sector tenants falling behind with their rent, according to a story published by the Residential Landlords’ Association (RLA) on the 22nd of August

A survey conducted by the RLA showed that, over the course of the past year, 54% of landlords who let to tenants in receipt of Universal Credit payments had seen them slip into rent arrears. 

82% of those tenants in arrears had only become so after filing a new claim for the benefit or who had had their previous housing benefit converted into Universal Credit. 62% of landlords remain concerned that if a tenant is moved to Universal Credit, they will no longer be able to afford their rent.

Furthermore, 68% of landlords complained that the amount paid in Universal Credit was insufficient to cover the amount of rent due.

Landlords may apply for Alternative Payment Arrangements (APA) for the receipt of the housing component of Universal Credit if the tenant has fallen more than two months in rent arrears. But even under these arrangements, landlords are waiting an average of eight and a half weeks to receive the payment – meaning that it can be as long as nearly four months before a landlord receives the rent they are due.

The proportion of tenants in receipt of Universal Credit who are now falling behind with their rent has increased since we last reported this trend at the beginning of the year – the percentage of such tenants in arrears has grown to the present 54% from the previous 49%.