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Direct Payment of Housing Benefits for Landlords is back on!

This entry was posted on Wednesday, February 4th, 2015 by Nigel

Universal Credit is the biggest shake up to the benefits system in the last 25 years. In a nut shell, when Universal Credit goes live later this year it will mean that any of your tenants on benefits will receive one lump payment per month.



The reasons why one lump payment is a positive thing:



  • Your tenants should not rely on the state to manage their money through it being broken down into different payments e.g. child tax credit, housing benefits, income support etc.


  • By receiving one lump payment per month universal credit will allow tenants to have the independence to manage their own finances which we all do in the working world.



My reality:



  • A lot of my tenants openly admit that they are bad with money. They find the idea of having to manage their own finances stressful and if it someone else could do it, they would defiantly prefer this.


  • The biggest worry for some of my tenants is that they never will have had this amount of money in one lump payment which universal credit will provide. Not only does the tenant need to make sure that they do not spend the rent but also that they have put enough money aside to feed their children because they are use to receiving payments weekly for this at the moment.



  • The food shelters in the North East are really worried about universal credit. A contact I deal with in the Middlesbrough food shelter is worried that stereo typical situations will happen-payments will be made monthly, a tenant will not budget properly then in the last two weeks there will not be enough money for the bear essentials creating real poverty.



Now for the GOOD NEWS-breaking news:




Landlords who rent to tenants receiving housing benefit under universal credit will now see the payments being transferred directly to them under a change outlined by the Department for Work and Pensions (DWP).



As the first universal credit pilot scheme set up by the government went live in Ashton-under-Lyne, a circular to benefit staff revealed that payments direct to landlords are now allowed in trial areas.



The document stated that landlords can refer rental arrears to Universal Credit, and those owing less than two months’ rent will trigger a contact with the claimant to discuss non-payment.



Arrears of more than two months will switch to landlord direct rent payment automatically.



When Universal Credit was first launched/trialed, landlords could only receive direct payments in exceptional circumstances, and even then not automatically.



Landlords whose tenants are in receipt of benefits can now be rest assured that there is a fallback process in the event of missing rent payments, protecting them and their property. It will also give assurance to landlords who are looking to start renting to benefit tenants, in turn giving home-seekers more options when looking for somewhere to live



Plan B



Here at NGU Homelettings we have also made sure we have a PLAN B to allow direct payment if the government did not change their rules on this. We have approached different credit unions which allow essential bills (e.g. rent) to go straight out of an account as soon as the money goes in. If needed we have already set up online credit union applications which would be used for any new tenants or any change of circumstances to allow direct payment to be still achieved.



We are exports in Housing Benefits and as such need to make sure we can protect your rent as the government changes its policies. In 2012 we managed over 550 properties and only had a total of £1,500.00 arrears. This shows our starting point is right in getting good tenants for our properties and then the operational side of our business is also geared right to making sure that you get paid!



We manage properties in Northumberland, Newcastle upon Tyne, Gateshead, Sunderland, Durham, Stockton-on-Tees, Billingham, Middlesbrough, Redcar and Cleveland, Hartlepool-the whole of the North East!



If you would like to find out more about what we do at NGU Homelettings, please do not hesitate to get in contact with us!







Chris Fitzakerley


Managing Director

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