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Universal Credit continuing to hit landlords’ finances

Universal Credit continuing to hit landlords’ finances


The roll out of the government’s flagship benefit reform is causing financial difficulties for landlords as tenants receiving Universal Credit struggle to budget for rent and face delays in payments.

Universal Credit is intended to simplify the existing benefits system by consolidating a range of benefits, including housing benefit, into a single monthly payment. Previously housing benefit was paid directly to a renter’s landlord, but under the new system recipients are intended to be in control of their own money.

However, lengthy waiting times before an applicant can receive their first payment, administrative issues and problems budgeting for priority expenses, such as rent, has led to many people receiving Universal Credit falling into arrears.

According to the Residential Landlords Association, 38% of landlords with tenants receiving Universal Credit are owed rent, an increase of 10% on last year.

In an interview with the Guardian, one Croydon based landlord has revealed that she has been left with £9,500 in arrears after a tenant on Universal Credit was unable to keep up with their payments.

The landlord, who preferred not to be identified by her real name, said the council who arranged the tenancy had given her assurances that the rent would be covered by housing benefit. In January, however, the tenant was switched to Universal Credit and rent payments ceased.

Since then she has been unable to recover the arrears owed to her, leaving her £9,500 in debt.

Richard Lambert, chief executive of the National Landlords Association, said; “Underlying all the problems with Universal Credit is the freeze on housing benefit rates, which means that the housing element of Universal Credit is simply insufficient for many tenants to be able to cover their rent.”

How can we help you?

At Landlord Debt Advisory, we offer bespoke solutions for landlords with problem debts. If you’re a landlord struggling with negative equity, underperforming properties or the impact of recent tax changes such as Section 24, contact Landlord Debt Advisory for an initial free, no obligation consultation.

After we resolved his case, one of our recent clients said; “We contacted Landlord Debt Advisory as a buy to let property purchased in the housing boom left us with negative equity.

“They dealt with our case very professionally and efficiently from start to finish. They had an in depth knowledge of what options were available to us and provided us with advice on the best option to take.

“They dealt directly with the lender and provided us with regular updates on the progress of the case. We got a great result in the end which has alleviated a lot of stress caused by being in negative equity.”

Check out our reviews and all us on 0161 222 4311, or go to our website and start the process of dealing with your debt.

Our team of property debt specialists offers a range of possible solutions based on your situation

Whatever your circumstances, the process starts with a case review. We will obtain all of the original documentation on your mortgage from your lender so we can assess your needs and work out the best way for us to help you

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