Government Offers Direct Payment Guarantee For Social Landlords

Government Offers Direct Payment Guarantee For Social Landlords

Private Rental Sector Landlords
Expected To Fend For Themselves

PRS landlords were left furious after the Government Welfare Reform minister offered social landlords the opportunity for direct payment of housing benefit under the Universal Credit scheme, but there was no such offer for private landlords.

Government Welfare Minister, Lord Freud has offered landlords a series of small concessions over Universal Credit, with payment of housing benefit to tenants temporarily suspended if rent arrears exceed two months. However, this only applies to social housing landlords, i.e local authorities and housing associations and not private sector landlords.

Lord Freud confirmed that direct payment of housing benefit to tenants who are at least two months’ behind with their rent, would be suspended, with the total amount of rent outstanding paid back to social landlords within six to nine months.

However, Lord Freud revealed that the Department for Work and Pensions (DWP) would intervene and review direct payment after tenants had accumulated the equivalent of one month’s rent arrears. He also cautioned that this concession would only be a temporary measure for the majority of tenant claimants and most would return to direct payment within six months of the rent arrears being brought up to date.

Lord Freud told delegates at the Chartered Institute of Housing conference “We don’t want non-payment of rent to be a way out of direct payments. Options at this point could include a re-assessment of an individual’s financial capability, a possible move to managed payments, or possibly extra support to get the individual on the right track to prevent the accumulation of further arrears”.

The minister also estimated that at least 80% of tenant claimants would be expected to pay their rent on time after the scheme is implemented, and suggested that social housing providers may want to move some tenants onto direct payments earlier, allowing social landlords to scale up preparation activities and rent collection activities as they move tenants onto direct payments.

Private sector landlords have often felt that the government are only interested in making money for themselves, a point that seems to be reinforced by the sweeping welfare reform.

It is almost as if the Government are envious of the UK private rented sector and want to cash in on the property profits of landlords and now, the Government are using social housing tenants to make sure that they get some.

Private rental sector landlords are furious over the obvious discrimination by the Government and there are multiple threads on various landlord forums voicing private sector outrage at the government only taking action to protect the rental incomes of social landlords, leaving the UK PRS landlord to fend for themselves again.

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