Universal Credit, the Government’s new welfare system, could cause up to 1.3m tenant evictions from private rental homes, the Liberal Democrat Department for Work and Pensions (DWP) spokesperson, Stephen Lloyd MP, has warned.
Lloyd says that delays in payments mean that more tenants are in rent arrears, which could lead to a sharp rise in benefit claimants in the private rental sector being evicted and potentially made homeless.
The MP, like many property experts, would like to see the housing element of Universal Credit paid directly to landlords. However, new data released this week by the DWP shows that just 6% of Universal Credit claimants in the private rental sector have their rent paid direct to their landlords, compared to 35% in the social rental sector.
According to the Residential Landlords Association (RLA), 73% of landlords still lack confidence in letting to tenants on Universal Credit, due to uncertainty that they will be able to recover rent arrears, while 38% have already experienced Universal Credit tenants falling into arrears.
Lloyd said: “If this doesn’t change, we should expect a spike in evictions by private landlords, who are already wary of renting to people on benefits, and a rise in homelessness that local authorities will have to deal with.”