A Universal Credit trial in Torfaen South Wales has resulted in an increase in arrears from £20,000 to £140,000 in just seven months from July to January.
CEO of Brofn Afon Housing, Duncan Forbes said, “That was a group of people who had a good track record of payment and pretty low level of arrears, thrust into a position where they are now in significant arrears. At the same time we’ve increased our staff levels by about double what we would normally put into income recovery. We’ve been very successful up to now in getting the number of evictions right down, but we can see that inevitably steadily rising. The difficulty for us is that if there’s no long-term solution to paying that rent we can’t sustain business as a landlord.”
Despite the obvious disaster Universal Credit will be for both tenants and landlords, the Welfare reform minister Lord Freud (I thought the Freuds were known for being intelligent!) is still supporting Universal Credit and said: “Millions of people will be better off on the new benefit.” To which we have to agree – yes millions of benefit claimants who keep the money and don’t pay Landlords their rent will certainly be better off.
Should we as landlords of DSS tenants be worried? Well it is a concern. But, taking into account the possibility that the government will not come to its senses in time and cancel the whole misguided notion before the Autumn, we have a plan in place to ensure we still get paid. Many landlords will not have a plan and will either suffer financially or simply stop renting to DSS tenants.