Social tenants who fail to keep up with their rental payments may have up to 20 per cent of their benefits deducted and passed directly to the landlord, following changes brought in this month according to a report on insidehouseing.co.uk
A minimum of 10 per cent will be deducted in cases where tenants are behind with their rent. Previously this figure was 5 per cent.
The amounts will be taken out of new Universal Credit payments, which combines up to six benefits in one monthly payment.
UC is paid directly to the tenant rather than the landlord, in a move that ministers say will “encourage financial responsibility.”
Claimants who need extra support can have the housing benefit portion of UC paid directly to the landlord as a “managed payment” – in a modification to UC that reflects concern among housing charities that the new system will actually increase rental arrears.
In the DWP statement Lord Freud, Minister for Welfare Reform said he “would encourage landlords to think about identifying tenants who need support to prepare for this, and put those who are ready onto a direct payment early” and also citing that “UC is now available in 1 in 10 Jobcentres and will be in almost 100 by Christmas, with national roll-out beginning early next year – so now is the ideal time to boost preparation activity.”
Protecting your buy-to-let rental income
Ensuring – as far as possible – that you get the rent owed to you by your tenant(s) is crucial if you are a buy to let investor and the 20 percent UC deduction may certainly help to alleviate concerns over possible rental loss for those landlords who rent to tenants on benefits. Click4quote.com provides Landlord property investors insurance for those who have tenants on benefits and also provides legal expenses, rent recover and rent guarantee options. Why not get a quote online today.