News Article

"In May, you MUST give your Tenants the Renters Rights Information Sheet or

YOU RISK  - £7,000 FINE  PER TENANT PER PROPERTY."READ MORE

Reminder 1 Oct introduction of Universal Credit

24th Sep 2013

From October 2013 the benefits people receive in respect of Welfare, Employment, Housing (LHA) and childcare support will be harmonised and become a single payment known as a 'Universal Credit'. Vetting Tenants on Benefits and having a guarantor in place will become more critical to minimising a landlords exposure to losses
 
Any tenant who is currently in receipt of housing benefit is at risk of having the amount they receive reduced. As a landlord this may mean that you too could be at risk from tenants who fall short of paying their full rent.
 
Should the Tenant be in more than eight weeks rent arrears there will now be a mandatory right to request direct payment (this is due to a revision in the rules May 2013). see Tenant on benefits in rent arrears
  • Without an assured safetynet of Direct Payment private landlords may be inclined to take a more risk averse investment view and reposition their portfolios and be wiser to stay clear of areas with higher unemployment or socially deprived areas; this in turn may create social ghettos where only low income and benefits tenants reside.

Summary

The Welfare Reform Act 2012 received Royal Assent on 8 March 2012, the Act sets out fundamental changes to the welfare system, aimed at improving the benefits system to reduce dependency on welfare through: improving incentives to work, making work pay and reducing overall spend.

It introduces:

  • A total household benefits cap will apply on the amount of benefits any individual or couple is entitled to (from April 2013)
  • A size criteria for those in social housing deemed to be under-occupying their home (from April 2013)
  • Universal credit - a single working age benefit called ‘universal credit’, which replaces current benefits for employment, housing and childcare support (from October 2013)
  • Direct payments will be introduced for those moved onto universal credit. This will be paid as a single payment direct to the claimant rather than the landlord (from October 2013)
  • Pension credit – help with rent will be incorporated into a new element of pension credit called housing credit (from October 2014)

Demonstration projects

  • PIMS Comment - The initial test projects have proved what a fiasco the Universal Credit is - see our article Universal Credit trial causes rent arrears to go sky high by a massive 700%. read more

Where there are rent arrears

  • Issue a Section 8 Notice for rent arrears as soon as the Tenant owes two months’ rent [7 days after second missed payment due date constitutes two months rent arrears ] and also issue a Section 21 Notice (a good page to review is Compare Tenant Eviction Notices ) – this then makes the person vulnerable to homelessness; therefore the council will be more willing to consider direct payment
  • There are no guarantees you will secure direct payment, so it is imperative to make sure that you have other preventative measures in place.
 


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"In May, you MUST give your Tenants the Renters Rights Information Sheet or

YOU RISK  - £7,000 FINE  PER TENANT PER PROPERTY."READ MORE