Agents advised to help struggling tenants as benefit change kicks in

Propertymark is advising letting agents to prepare for upcoming changes to rent collection and to support tenants facing financial challenges. Starting in April:

• The Universal Credit Fair Repayment Rate will drop from 25% to 15%, reducing tenants’ debt repayment capacity but increasing disposable income for 1.2 million households by about £420 annually.
• The Department for Work and Pensions (DWP) will overhaul the system of automatic benefit deductions for arrears and rent, following a court ruling deeming the practice unlawful due to lack of tenant consultation.
• These changes may lead to slower repayment of rent arrears and increased financial strain on landlords, requiring more proactive tenant engagement.

Additionally, working-age benefits will increase by 1.7% from April, giving around 5.7 million families an extra £150 annually. However, fewer than 10% of private rented homes are affordable for those relying on Universal Credit.