Friday, 8 November 2013

Landlord Fears Rent Arrears Rise Under Universal Credit

A private sector landlord with more than 700 homes says benefit changes could put his business at risk.
Carmarthenshire-based Kevin Green fears tenants will fall behind on their rent when a new system of paying benefits is introduced.
He says he may have to stop letting to people on welfare.
The UK government says it is restoring fairness to the welfare system, and that it is working on protecting landlords and tenants.
Most of the 762 properties Mr Green lets are in or near Llanelli. Around 60% of his tenants receive benefits, he says.
Last month the UK government began phasing in one of its big welfare reforms - Universal Credit. The roll-out is due to finish in October 2017.
Next spring Shotton, Flintshire, will become the first part of Wales where it is introduced.
Six working-age benefits - including housing benefit - will be merged into one monthly payment into the claimant's bank account.
A trial of the system in Torfaen among social housing tenants found arrears rose from around £20,000 to almost £140,000 in seven months.
Private sector tenants already have their housing benefit paid to them, rather than it going directly to the landlord.
But millionaire Mr Green, who experienced homelessness in 1984, said he feared some would struggle with their household finances and fail to keep up with the rent when benefits are merged.
"What we're finding is if rent payment is put in the tenants' hands they are not being taught in school or further education to run a home and they just can't budget," he said.
"And it's going to lead to huge arrears. It could lead to us going bust at the end of the day and not providing homes for less fortunate people as well."
He added: "If we pull out the market that's hundreds of houses that we rent out in this area that's pulled out.
"We're the UK's largest private sector landlord. We pull those out of the social welfare market and that's houses that people haven't got to live on housing benefit."
A Department for Work and Pensions spokesperson said: "Our reforms restore fairness to a system that was allowed to spiral out of control.
"We are working now to ensure that the right protection and exemptions are in place for both tenants and landlords ahead of Universal Credit.
"Direct payments are an important part of Universal Credit to make it easier for people to move into work, but we've been clear from the outset that we will take steps to protect vulnerable people."