Benefits change sparks fear of yet more ‘financial strain’ for landlords

Propertymark is warning letting agents of potential “financial strain” for landlords due to upcoming benefit changes. Key updates include:

• The Universal Credit Fair Repayment Rate will drop from 25% to 15%, increasing disposable income for 1.2 million households by about £420 annually but slowing rent arrears repayment and prolonging recovery periods.
• Following a court ruling, the Department for Work and Pensions will overhaul the automatic deduction system for rent and arrears from benefits, as it was found unlawful due to a lack of tenant consultation.

This marks a shift in managing rent arrears for benefit recipients, likely requiring more proactive engagement with tenants. Propertymark advises agents to prepare for these changes and consider supportive measures for tenants facing financial challenges.