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Universal Credit Will Backfire Warns Think Tank

Government Welfare Reforms Set To Backfire As Claimants Don't Want Universal CreditThe proposed welfare reforms are not wanted by the majority of claimants or their landlords according to research by the Social Market Foundation.

Tenants with low incomes and families claiming benefit will be pushed further into financial difficulties and debt by the shift to monthly benefit payments under Iain Duncan Smith’s welfare reforms.

Attempts as part of the new Universal Credit system to encourage claimants to budget properly and make their own rental payments risk backfiring, the Social Market Foundation said.

It called for the introduction of an online budgeting tool allowing claimants to set the frequency of payments themselves and allocate income to different items of expenditure.

However the foundation stopped short of calling for landlords to continue to receive direct payments for tenants that were considered vulnerable or at risk.

Under the Universal Credit there will be one single monthly benefit payment – rather than weekly or fortnightly as at present – and all tenants will have to pay landlords themselves.

The Government says it will be “flexible” with those who struggle to manage their money.

Research by the Social Market Foundation, entitled Sink or Swim: the Impact of Universal Credit, found that most low income households were opposed to the moves, expressing fears that they would not be able to budget properly and could end up in rent arrears and even face eviction.

Nigel Keohane, the think tank’s deputy director and co-author of the report doubted whether plans by the Government to provide special arrangements for certain vulnerable individuals was adequate, stating: “The Government’s laudable aim that Universal Credit should prepare families for work, boost their resilience to financial shocks, and simplify the system is at risk of backfiring. By moving to a single monthly payment for all benefits, the Government is removing the markers and aids that families currently rely on to budget effectively. Our research shows that this will throw people in at the deep end leaving them either to sink or swim. This laissez-faire approach will create real problems not only for families themselves, but also for public service organisations, such as social and private sector landlords and childcare providers, that families will end up owing money to. Instead of mandating monthly payments and centrally planning which families to exempt, the Government should allow low income families to take the decision themselves through an online budgeting tool,” he said. “This would allow the reforms to work with the grain of wider government objectives like personal responsibility and increased financial capability rather than working against them as the current system seems set to do.”

A Department for Work and Pensions spokesperson said: “Universal Credit will be paid monthly because most people in work are paid that way and the system should help people get used to the patterns of working life. But we will make sure that no one falls through the cracks, and we are working with local authorities and the financial industry on how best to support individuals. We have always said we would be flexible with people who might struggle to manage their money.”

Hmmm…..If that last statement is true, then the DWP had better start preparing to open a separate department to deal with struggling landlords as the Universal Credit system is severely flawed and the majority of claimants don’t want direct payments because they are unable to cope at the present time, so what happens to them in 2013?

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the number of empty UK properties still increasing

The Number of UK Empty Properties Continues To Rise

Despite campaigns from all quarters of the media and industry bodies, the number of empty homes in the UK increased significantly in 2011, new research has shown.

Data from the Communities and Local Government department, (CLG),the Office for National Statistics, (ONS), and Halifax’s own housing statistics database, the study revealed a 1.8% rise in empty residential dwellings.

According to the Halifax Empty Homes survey, which takes into account all private and public empty residential abodes, including those that have been vacant for under six months – leapt from the 650,127 recorded in April 2010 to 662,105 for the same period earlier this year.

Despite this trend, the study also revealed some more positive movement, with the amount of long-term empty private homes, those that have been without occupants for at least 6 months, dropping to the lowest levels since 2008.

These properties account for 44% of all empty residences, underlining the significance of the improvement.

It was shown that April 2011 that there were 292,313 examples of this kind of home, which represented a 1.1% decline on the 295,519 reported in the same four-week period 12 months earlier.

Stephen Noakes, Mortgage Director at Halifax,(a division of Bank of Scotland), said: “The findings show the considerable impact empty properties can have on the overall housing market, claiming it is therefore necessary for action to be taken to address the issue. Long-term empty homes account for about 1.6% of all private homes in England. And at a time when first-time buyers are still facing numerous obstacles to getting on the ladder, it is imperative we look further at the issue as an industry.”

The issue of empty homes that are fit for purpose remains a particular problem in a number of areas across the UK, where the proportion of void occupancy is double the national average. Even the UK’s Private Rented Sector is not unaffected. Landlords with properties requiring substantial improvements are lying empty due to the current lack of available finance.

UK property owners and landlords are reminded that they should have appropriate <a href=”http://www.legal4landlords.com/insurance-services/”>insurance</a>, in order to protect their property assets. However, that insurance may still be invalid if the property is unoccupied for a lengthy period of time (see the small print) and specialist insurance may be required.

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