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More needs to be done to improve Universal Credit

Wednesday 17 July 2019

At recent Government meetings about Universal Credit, ARLA Propertymark highlighted that the continued cap in Local Housing Allowance is having a significant impact on its recipients’ ability to obtain good quality and well managed accommodation.

ARLA Propertymark is concerned that the gap between rent and Local Housing Allowance has more than doubled in most areas since 2016. Local Housing Allowance is used to calculate housing benefit for people in private rented accommodation. The rates they get vary from area to area and are compared with the 30th percentile of local market rents.

According to the Department for Work and Pensions in the four weeks to 9 May 2019, the number of people on Universal Credit has increased by 5% to 2.0 million. Of these people, 34% were in employment, compared to 37% in May 2018. Of these people, 55% were female, compared to 49% in May 2018.

In January 2019, 36% of ARLA Propertymark members who we surveyed said they have seen a reduction in landlords renting to Universal Credit claimants. Furthermore, 32% said that rent arrears have increased amongst tenants on benefits since the introduction of Universal Credit. Concerns remain that the main reason landlords are reluctant to let to those on housing benefit is systemic failures of the system itself.

Through involvement on the UC DWP Strategic LandlordGroup, ARLA Propertymark has provided feedback on revisions to the UC47 process also known as ‘Apply for Direct Rent Payment’. Work is now ongoing to develop an online solution to make it easier and quicker for landlords to complete.

In June, David Cox, Chief Executive of ARLA Propertymark attended a roundtable at Number 10 to discuss the negative impacts of so-called ‘No DSS’ adverts. Following the meeting, Metro Bank announced a pledge to remove ‘No DSS’ restrictions. According to UK Finance, 89% of lenders who have buy-to-let mortgages do not have restrictions about who they can let to, which is good news.

Fact sheet and Guide

The Department for Work and Pensions have also taken on board feedback from agents and landlords and is developing new, simplified and visual guidance to support agents and landlords. ARLA Propertymark members can also download a Fact Sheet on Universal Credit in the member’s area.

DOWNLOAD FACT SHEETS

GUIDE FOR LANDLORDS