Rent arrears and Universial Credit

 To ask the Secretary of State for Communities and Local Government what steps he is taking to encourage landlords to accept benefit claimants as tenants. [157074]

Mr Prisk: The Government estimates that, at any point in time, around one-third of households privately renting are in receipt of housing benefit. This suggests that it continues to be possible for claimants to access the sector. However, private landlords and letting agents operate on a commercial basis and, as for any business, it is reasonable for them to make independent The English Housing Survey headline report for 2011-12 indicates that almost two-thirds (64%) of households in the social rented sector were in receipt of housing benefit.

Welfare reform will improve work incentives and help more people move into employment. This is good news for landlords as well as the Government. However, we recognise that the move away from managed payments to landlords for working age benefits claimants is a challenge, particularly for the social sector. That is why the Government is committed to developing universal credit in a way that protects landlords’ financial position.

Managed payments to landlords will continue where claimants are deemed to be at risk of non-payment or where arrears build beyond a certain level. Once on managed payments, we will recoup arrears on behalf of the landlord from the claimant’s universal credit and will continue to do so even if the claimant moves to a new address.

We are working with DWP to ensure the right safeguards for landlords and tenants are designed into universal credit through learning from the direct payment demonstration projects.

These safeguards will apply in both the private and social sectors. 

Source: Hansard 4 June 2013