Landlords fear introduction of Universal Credit

Of the 500 landlords surveyed in the National Landlords Association’s latest Quarterly Landlords Panel, 96 per cent are concerned over problems with the introduction of Universal Credit.

This is clearly linked to the two leading priorities cited for 2013, arrears avoidance (64%) and minimising voids (56%).

Universal Credit will replace the current benefit system in April 2013. Under the new system, most benefits, including Local Housing Allowance (LHA), will be rolled into one monthly payment. In addition, direct payments of LHA to the landlord will cease.

As for landlords’ hopes for 2013, many would like to buy property (89%) and undertake renovation projects (76%).

David Salusbury, chairman of the NLA, said: “The implementation of Universal Credit brings the biggest shake-up of the benefits system we have seen in recent years and is clearly causing concern among landlords and tenants alike.

“Although we support the principle of encouraging people to take responsibility for their finances, landlords have to deal with the problems which arise when this doesn’t happen in practice. Direct payments of housing benefit to the landlord have provided a reassurance which many fear may now be removed.

“I hope that landlords, tenants and local authorities can work together to ensure the smooth transition from Local Housing Allowance to Universal Credit. If tenants fail to meet their rental commitments, we are likely to see landlords withdrawing from the Local Housing Allowance market.”