Exclusive: Huge frustrations with Universal Credit rent payment system revealed

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HMO operator Nick Sturgeon says providing accommodation to UC claimants is becoming too risky and expensive to consider.

A landlord based in South Yorkshire
has contacted LandlordZONE to share his growing exasperation with the Universal
Credit (UC) rent payments system and how it continues to cause mounting problems
for his business, and many other landlords like him.

Nick Sturgeon, a professional
HMO landlord, rents out properties to tenants in receipt of Universal Credit
and recently put his concerns to the Department of Work and Pensions (DWP).

These include how, because
the DWP insists on paying claimants direct initially, it can take him up to 11
weeks to receive his first rent payments when a tenant gets into arrears.

In other words, when these
tenants use the money to fund their living expenses rather than pay the rent, payments
are subsequently then switched to the landlord, but often too late.

“Support is not given to the
private landlord under the Universal Credit system because of the way the
legislation is structured,” says Sturgeon.

“This is causing a massive
reduction in the number of landlords willing to take tenants in receipt of UC,
pushing up homeless numbers and raising poverty because people on benefits are
finding it increasingly difficult to be safely housed. 

“For example, I have reduced
down from operating 11 properties to just two because of the way UC payments
are administered.”

Other key failings of the
system put to DWP by Sturgeon include:

• How the system does
  not factor in the mental and physical state of a UC tenant. To avoid the almost
  inevitable arrears they get into, vulnerable tenants should have their rent paid
  directly to their landlord from the start of a tenancy, says Sturgeon.
• DWP Case Managers and
  Account Managers rarely respond when sent paperwork by landlords chasing
  payment or requesting that rent be paid to them direct after the tenant has
  agreed that it should take place.
• When a tenant in
  receipt of UC gets into arrears, it can take months and even years for the
  money to be recouped by the landlord via the Third Party Deductions system.
• If a tenant is in
  arrears and then moves out, it is very difficult for landlords to get the money
  owed deducted from the person’s benefits payments.
• Private landlords are
  treated more harshly than social landlords or charities providing
  accommodation, who are more easily able to be reimbursed for arrears through
  the Alternative Payments System.

“Why are such normal and previously standard arrangements
not allowed or extended to the private landlord under Universal Credit when
this was a lynchpin of the Housing Benefit system?” asks Sturgeon.

“It ensured that a tenant could request accommodation from
a landlord who knew they would be paid retrospectively for providing the
accommodation.”

If you are a landlord suffering similar problems with the
UC payments system as Nick, get in touch via editor@landlordzone.co.uk.

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