A landlord's guide to Universal Credit

Universal Credit | a guide for Landlords - haart advice

Universal Credit is a monthly payment given to some people to help them cover living costs. It can be for a number of reasons, including due to illness that prevents them from working, or as child tax credit. As it can be used as housing benefit, it is vital that landlords understand what this means and how best to support tenants that are receiving Universal Credit.

How does Universal Credit affect rent payments?

In most cases, a tenant will pay their landlord from a bank account using a direct debit, taking full responsibility for paying rent. For social housing tenants, they can (and often do) opt for rent to be paid directly to their landlord. With the introduction of Universal Credit, any help with rent goes directly to the tenant, which leaves them responsible for paying rent.

As a landlord, it is a good idea to reach out and speak to your tenants about their situation. Each one is unique, and they may require advice on their responsibilities around rent. You can signpost them to support and guidance, most of which can be found online, but we have some suggestions:

What is an Alternative Payment Arrangement?

It is possible under the terms and conditions of Universal Credit for a tenant to opt for rent to go directly to their landlord, known as an Alternative Payment Arrangement, but this must be applied for. Landlords are informed of this decision should a tenant decide to make the arrangement

Tenants without bank accounts

According to the National Housing Federation, around 15% of local authority tenants and 13% of housing association tenants do not have a bank account. The problem with this is tenants require a bank account to receive their Universal Credit payments. If you have a tenant who is unsure of how to open or manage a bank account, you can help them with this too. This guide from The Money Advice Service is useful for how to do this.

How might direct debits be affected?

Some tenants may not wish to use direct debits at first if they are still figuring out the logistics of receiving Universal Credit or are unfamiliar with using a bank account. They may have had direct debits previously refused or received charges for late payments, which can obviously be stressful.

You can discuss this with a tenant to make sure they are comfortable with an agreed method of paying rent. You can go over setting dates for rent to be sent to you and keep the lines of communication open with them to make sure that rent is paid on time. The Government provide advice on budgeting, but if you think this might be difficult for your tenant, you can point them in the direction of organisations such as Citizens Advice for further help.

Further advice and support for landlords

For more advice there is the Government’s guide to Universal Credit and rented housing or you can head to the National Residential Landlords Association (NRLA) for advice.

haart is more than happy to help you let your property, with services available from accompanied viewings to complete property management available. We’re on a mission to help landlords, with plenty of online guides and in-branch advice. Find your local branch, here.