Universal Credit: Private Rented Sector

Tracy Brabin Excerpts

Tuesday 9th January 2018 Westminster Hall

[Tracy Brabin (Batley and Spen) (Lab/Co-op)]

It is a pleasure to speak under your chairmanship, Mr Gray. I thank the hon. Member for Eastbourne (Stephen Lloyd) for securing this important debate.

As a young child, my father was out of work for quite a long period and we could not pay the mortgage. My mum handed the house keys to the building society and for several hours we were physically homeless until the council found us a flat. That experience has stayed with me all my life. I will always be grateful to the council for saving us, because being homeless is not about being physically on the street. It is about people not having a permanent roof over their head, and that is something that all children should be entitled to.

Although the Labour party supports the idea of universal credit, sadly—as we have seen in our constituencies—the Government’s wilful determination to roll it out, glitches and all, means that some of the most vulnerable people living in the private rental sector are at risk of building up rent arrears to such a point that they are evicted and made homeless. That is something that, in particular, no child should have to experience.

[David Simpson (Upper Bann) (DUP)]

Northern Ireland has been mentioned. When we were negotiating with the Government, we were concerned about people living with mental illness, people living with disabilities and single parents. That was a major issue in helping us to come to the conclusion and agreement we have in Northern Ireland.

[Tracy Brabin]

I totally support what the hon. Gentleman says: this is about not just families, but people with extra needs. Single parents in particular are most vulnerable to bullying landlords.

[Jessica Morden (Newport East) (Lab)]

Gingerbread states that two thirds of single parents rent privately, and from my casework, I know that that group of people and the children that they support is particularly hard hit.

[Tracy Brabin]

Gingerbread is a fantastic charity. In my constituency, a young woman came to me who was being bullied by her landlord in all sorts of ways because of her inability to pay her rent. Single women living with children are incredibly vulnerable to that.

The ending of an assured shorthold tenancy agreement with a private landlord is now the primary reason for families presenting themselves as homeless to the local authority. The pressures on local authority housing could not be more severe. In Kirklees, for example, there are currently 9,700 applications for only 171 properties. It is a priority for all of us to support the private rental sector as universal credit is rolled out, if we want to lessen the burden on local councils. But this problem will not go away any time soon. The number of working households claiming housing benefit in the private sector has more than doubled since 2009, whereas the wages of some of the lowest paid in our society have stagnated. DWP figures confirm that only 7% of private renters are actually unemployed and seeking work. Sadly, although the Joseph Rowntree Foundation found that the private rental sector has grown by a third over the past 12 months, the number of those being evicted has also grown, with 7,200 more private tenants losing their homes in 2015 than in 2003.

[Melanie Onn]

My hon. Friend’s point is incredibly important. The Joseph Rowntree Foundation has been working with the Cambridge Centre for Housing and Planning Research, and they showed that in 2015, 80% of private sector evictions were no fault evictions. That resulted in individuals going to local authorities, but perhaps being considered as people who had made themselves intentionally homeless. Does she agree that that creates a huge difficulty in the system?

[Tracy Brabin]

The idea of people making themselves intentionally homeless is a huge problem for a number of my constituents. It affects their credit rating and rolls on into the rest of their lives in a really unacceptable manner.

The greatest concern for landlords is the move away from direct payments. Many worry that tenants will not have the capability to budget effectively and will end up spending the housing element of universal credit on other essentials. In the debate last year on UC, the Government argued that delaying payment for rent was the same as those in work being paid at the end of the month, so the delay was a good lesson in budgeting and responsibility. Well, maybe for middle-class families with savings or relatives with cash to see them through a tricky financial patch, but when—as the English housing survey discovered—66% of private renters have no savings, the ability to budget is not so straightforward.

After the Budget, the Residential Landlords Association did a snap survey, which found that 36% of landlords would have more confidence in letting to tenants on universal credit. Sadly, 64% said they would not. I suppose their caution is not surprising, given that the RLA reported a high rise in rent arrears where universal credit has been introduced. The National Landlords Association chair agreed, saying that they expected to see

“a steady decline in landlords being willing to rent to benefit claimants in the next 18 months to two years.”

Only 18% to 20% of private landlords accept tenants who pay their rent with local housing allowance. That is down from 46% in 2010-11. Why? Because universal credit encourages tenants to fall into arrears, and 38% of landlords have seen tenants in receipt of UC entering rent arrears. In Kirklees Council—my constituency council—437 claimants are on universal credit, with further roll-outs scheduled for later in the year. Some 82% of those are in arrears, to the tune of seven weeks’ rent on average, whereas before going onto UC, the figure was 5.1 weeks in arrears.

Landlords do not want to evict tenants, because it costs £1,800 to end one tenancy and start another. They want the security of knowing that they will have their rent paid regularly, in a timely fashion. Although bad and greedy landlords have given the sector a bad press, a substantial number of landlords in the private sector are hard-working and understanding. They often have only one property to let out as a contribution to their pension, or as a way of saving for the future. In fact, two thirds of landlords are basic rate taxpayers and are not on high incomes. However, although they are sympathetic to tenants, they know that they too would fall into debt if the rent was not paid.

In conclusion, it is vital that we pause and fix universal credit, ensuring that families are not made homeless due to delays in the system. More widely, we must also increase the number of affordable homes that are available. Only by increasing the numbers of affordable homes being built will we reduce waiting lists, keep rents low and keep families in private rental housing to ease the burden on councils, supporting them to provide excellent social housing for the most vulnerable in our communities.