Universal Credit could leave landlords out of pocket

The government's introduction of Universal Credit could leave landlords out of pocket.

MPs have raised concerns over plans to provide Universal Credit money to be used for housing direct to claimants suggesting that this could lead to rent arrears.

Labour MP Clive Betts said: "The government has promised a great deal. It has provided assurances that the reforms will not undermine the financial viability of housing associations.

"It has promised guidelines for local authorities on how 'vulnerable' tenants - who will have their rent paid to their landlord - will be identified.

"It has promised an arrears trigger that will switch payments back to landlords when arrears reach a given level. It has promised to take into account the results of the Direct Payment pilots, which show increased levels of rent arrears, before the rollout of direct payments nationwide. These promises are welcome but must be speedily fulfilled."

Changes which came into place on 1 April, including a cap of £26,000 of benefits per household and payment reductions for those deemed to have a "spare bedroom", would "add to pressures on family budgets and local authority and housing association collection rates", the MPs said.

They called for more "joined-up thinking" by government departments to ensure the changes were as trouble-free as possible.