A junior government minister has criticised opposition MPs for “unhelpful scaremongering” over the issue of Universal Credit (UC), which they say is causing landlords to flee the market.
In Commons debate yesterday morning, Liberal Democrat MP for Eastbourne Stephen Lloyd, warned that the Government needed to introduce default payments of the benefit to landlords in order to prevent a “complete car crash”.
He cited figures from a series of different industry bodies including the Residential Landlords Association and the National Landlords Association that tenants on UC were falling into arrears because of the way the benefit is paid.
Lloyd, who called the debate, said: “There is still a long way to go to understand that they [the Government] have made the system so complicated that it is still going to be hard for residential landlords. What does this mean? It means they are going to pull out in droves.”
“Despite the challenges around tenants sometimes being on benefits and the prejudices that landlords have against them, they are often founded on the reality that landlords don’t feel secure about getting their money. If they know that they are actually going to get a default payment then I am absolutely certain that there will be an increase among the number of private rented stock available to people on UC.”
But Caroline Dinenage, parliamentary under-secretary of state at the Department for Work and Pensions (DWP) warned that “unhelpful scaremongering” from opposition MPs about the effect of Universal Credit, 10% of which will have been rolled out by the end of this month, was affecting tenants and private landlords.
She said the DWP was adopting a “test and learn” approach and was listening to feedback.
She added that private landlords could now request managed payments on email by filling in just one form.
She said: “Since 2008 housing benefit has been paid to claimants by default, not directly to landlords. This remains the case with Universal Credit. In fact, in housing benefit currently only 25-30% of payments are made directly to landlords in the private rented sector.”
She said safeguards had been put in place to reassure private landlords who had expressed concerns about letting to UC claimants. She said that “moving forwards”, these concerns should be groundless.