The welfare reforms are due to come into effect in just over one month’s time, which is causing many anxious landlords, tenants and MPs to start becoming even more vocal with their concerns. The reforms will mostly affect those that receive housing benefits, as they way that they are paid is going to change along with the amount many families in the UK will receive. Landlords have already been planning for the changes by talking to their tenants and protecting themselves with landlord insurance, but many are still concerned for the future.
Now, Liberal Democrat chief secretary to the treasury Danny Alexander has written to the work and pensions secretary Ian Duncan Smith stating his fears over the welfare reforms, especially that they could lead to many tenants falling into rent arrears and eventually becoming homeless. The letter has also urged the Conservative cabinet colleague to moderate the reforms in order to protect the most vulnerable tenants.
However, it has been revealed that Mr Alexander actually would have had to sign off on the original proposals for the welfare reforms, which means this new letter may be too little too late. He has accepted that tenants will not get a say in how their housing benefits will be paid to them after the welfare reforms come into effect, however he has also threatened that he will try to block the changes if they do not include safeguards for the vulnerable.
The Department for work and Pensions responded by stating that they were planning on initially launching six pilot schemes that would reveal which benefit claimants would not be able to cope under the new changes and make exceptions for these groups. However, there have already been trials for the reforms, which showed that eight per cent of those receiving housing benefits directly fell into rent arrears, which is a sixty per cent increase from the usual five per cent.
A spokesman from the National Housing Federation said: “Many residents on low incomes currently choose to have their benefit paid directly to their landlord as a rational choice to help them manage their finances. The government is planning to remove that choice. More than a third of housing associations believe the shift to direct payments to tenants under universal credit will make it harder for them to build new homes, as they will have to deal with rising arrears in an already tough economic environment.”