Universal Credit: Private Rented Sector

Wera Hobhouse Excerpts

Tuesday 9th January 2018 Westminster Hall

[Stephen Lloyd]

I thank the hon. Gentleman for that intervention and welcome him back. I agree entirely, because universal credit is just one area. It is one side of the impact of what has been an ill-thought-through policy.

[Wera Hobhouse (Bath) (LD)]

I thank my hon. Friend for securing this important debate. Is it not important that the Government take away the freeze on the housing allowance cap, in order to make sure that housing benefit reflects market values, because otherwise the benefit does not keep up with the market value of the private sector?

[Stephen Lloyd]

My hon. Friend makes an important point. I think that is something that needs to be considered, particularly as regards the further caps that have come in over the past couple of years. I think those are unsustainable.

--- Later in debate ---

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate the hon. Member for Eastbourne (Stephen Lloyd) on securing today’s debate. What we are debating this morning is a serious component of the debate around universal credit, and it is right that we dedicate appropriate time to its consideration.

Colleagues from all parties and of all positions on universal credit will have been as concerned as I was to read research conducted by the National Landlords Association in the second quarter of last year that found that only 20% of UK landlords surveyed say that they are

“willing to let to tenants in receipt of housing benefit or universal credit”.

That comes on top of evidence received in September last year by the Work and Pensions Committee, on which I serve, from the Residential Landlords Association, which stated that 38% of the landlords surveyed said that they were having issues with tenants receiving universal credit going into rent arrears. The same survey found that almost a third of landlords had, in the past year, evicted a tenant in receipt of housing benefit, and that more than two thirds of the evictions had taken place due to rent arrears. That is obviously very worrying and undoubtedly gives Members of Parliament cause for concern.

It is important to recognise that these are not in every case new problems created by universal credit. Many tenants in receipt of housing benefit have been paid housing costs directly for a very long time. Around 70% of housing benefit claimants in the private rental sector have had their housing benefit paid directly rather than to a landlord. The housing element of universal credit is paid in exactly the same way. If people need extra support, their rent can be paid directly to landlords through alternative payment arrangements, and budgeting support can be made available. Claimants whose housing benefit was previously paid directly to a landlord will be offered that option automatically. However, as we have heard in the debate, there are issues with the system. Improvements can be made, and I believe that they should be.

Since the beginning of the universal credit roll-out, the DWP has proven that it is taking a “test and learn” approach, slowly and steadily rolling out the system while fixing and replacing problematic elements. That is why the Government have scrapped the seven-day wait, extended the deadline for repayment of advances, made advances easier to obtain and ensured that all DWP headlines are freephone numbers. For tenants, the DWP has taken numerous steps to prevent claimants from falling into arrears, including improving the processes for verifying housing costs and improving the support given to work coaches in jobcentres so that they can resolve housing issues as they arise.

The Government continue to work closely with landlords, local authorities and other organisations to ensure that claimants are supported. Crucially, it must be noted that when a private sector landlord asks for managed payment of rent to be arranged, it can be done on the provision of documentation evidencing two months of rent arrears. That should prevent unnecessary evictions on grounds of rent arrears, and I hope it does.

It is right that we should debate these issues today; they are incredibly important for our constituents. However, it is also right that we should recognise how cautiously and sensibly the DWP has moved throughout the entire roll-out of universal credit.

[Wera Hobhouse]

Will the hon. Gentleman give way?

[Andrew Bowie]

I will not, because there are many speakers to come and we are short on time.

The Government have listened to concerns brought by Members and the Work and Pensions Committee, and have acted on them, where necessary, in a calm and considered fashion. I have full confidence that that will continue as we debate the issues surrounding the private rented sector.