A new money management service which is designed to ensure landlords receive their tenants’ rent payments more efficiently has been launched by a community cooperative bank operating throughout North Wales.

The Rent Direct service which was developed by North Wales Credit Union is a service whereby housing benefits are paid directly into the tenant’s credit union account. Regular rent payments are then made via the credit union to the landlord using a system that ring-fences the sum of money required for rent payments the moment it reaches the account, ensuring that it cannot be spent otherwise.

John Killion, chair of North Wales Credit Union, said: “Rent Direct is just one of the many savings and loan services provided by the credit union that have been designed with real people and real needs in mind. It is a business solution enabling landlords to receive their rent payments on time, whilst also assisting tenants with financial difficulties.”

The service is free to qualifying tenants and has been created to remove the hassle and cost incurred as a result of rent arrears and eventual eviction.

There was an increase of 2% in unpaid rent during July 2012, up to £295m from £289m in June according to figures from the LSL Buy-to-Let Index which has reinforced North Wales Credit Union’s belief that there is a need to offer assistance to the tenant/landlord payment process.

The findings showed that tenant finances had deteriorated for a second consecutive month in July 2012, with 9.3% of all rent being late or unpaid at the end of the month.