State of the PRS - 2020, Quarter 1

Summary

The NRLA conducts quarterly surveys focusing on the current behaviours, motivations and experiences of independent residential landlords who let property in England and Wales. Part of these surveys also informs our Landlords’ Confidence Index (LCI) and the most recent LCI from the 2020 Q1 survey can be found here.

This survey looks at the experiences of landlords who let property to tenants who claim Universal Credit (UC).

It shows that the experience of landlords in navigating the UC system remains problematic. The system and not the client, is often the cause of rent arrears. The impact being that landlords become reluctant to let to tenants who require UC to meet their rent obligations. 

There is support among landlords for Guaranteed Rent Schemes but more needs to be done to demonstrate competent property and tenant management.    

Universal Credit tenants

Over a quarter of landlords surveyed identified that they either currently or have recently let property to tenants claiming Universal Credit.

The majority of landlords with tenants who claim Universal Credit have experienced rent arrears. Respondents identified these rent arrears most commonly occurred after the tenant had started a new claim.

Alternative Payment Arrangements

Landlords and UC claimants can apply for Alternative Payment Arrangements (APAs) where claimants are not able to manage their monthly payments.

Over a third of landlords have requested such an arrangement. Landlords expressed dissatisfaction with the APA process and it is clear the application process requires some attention. 

Landlord views on Universal Credit tenants

A significant percentage of landlords stated they did operate some form of “no benefit claimants” mechanism: often this is simply because they let property to market segment in which UC claimants are excluded on the grounds of income.

When asked about this reluctance to let to UC claimants, concerns around rent arrears and rent being paid on time were the two most commonly cited reasons for hesitancy.

Guaranteed Rent Schemes

One mechanism that could assist in helping more landlords let to UC claimants would be Guaranteed Rent Schemes.

When asked about these schemes many landlords offered some form of support. Those in support of these schemes recognise their benefits, including the opportunity to use property for social good.

Many more landlords would potentailly support these schemes with more detailed propositions on property management.