9th
Nov 2013
A Carmarthenshire based private sector landlord, Kevin Green, strongly believes that the changes to the benefits system will put his business at risk. He has within his portfolio a total of over 700 homes.
With the introduction of Universal Credit where a single monthly payment is made to the recipients and replaces the weekly and fortnightly payments, he forecasts that many tenants may end up in rent arrears.
He is seriously considering whether to stop renting out his properties to people receiving benefits.
Out of Mr Green’s 762 properties, 60% of his tenants receive benefits, the UK government says it wants to bring back fair system to the welfare system, and they are planning to introduce measures that will protect landlords.
After it's Pathfinder pilots, one of which was in Torfaen, the government has started rolling out the Universal Credit and the final phase is due to be completed in October 2017. It was widely reported that in Torfaen that after the program was brought in that rent arrears rose by 700%, see previous story.
The present system of benefits payments is that payments for rent, in the majority of cases, goes directly to the claimants. Under the new system of payments the six working-age benefits, including housing, is paid in one monthly lump sum.
Mr Green, fears that a percentage of his tenants will just not be able to cope with having to budget all their living expenses from the one monthly payment and that they could fall into rent arrears.
"What we're finding is if rent payment is put in the tenants' hands they are not being taught in school or further education to run a home and they just can't budget," he told BBC Wales Sunday Politics.
"And it's going to lead to huge arrears. It could lead to us going bust at the end of the day and not providing homes for less fortunate people as well."
He added: "If we pull out the market that's hundreds of houses that we rent out in this area that's pulled out.
"We're the UK's largest private sector landlord. We pull those out of the social welfare market and that's houses that people haven't got to live on housing benefit."
A comment was made by a spokesperson from the Department for Work and Pensions : "Our reforms restore fairness to a system that was allowed to spiral out of control.
"We are working now to ensure that the right protection and exemptions are in place for both tenants and landlords ahead of Universal Credit."
"Direct payments are an important part of Universal Credit to make it easier for people to move into work, but we've been clear from the outset that we will take steps to protect vulnerable people."
PIMS Comment
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John Snowden of PIMS.co.uk says: “There has been so much negative press about the Universal Credit system and we can understand why. However it should be pointed out that out of the approximate UK workforce of 35 million, there are roundabouts 11 million people who are on Working tax and Child credits and being in a work environment ,receiving monthly pay, they should have no problems with paying their rent.
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“There are areas throughout the UK that have high unemployment where the single monthly payment may indeed cause rent arrears and the Government is laying plans that means that if claimants do not pay their rent for two months, then in some cases it will be paid directly to the landlord.”
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