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Universal Credit will dramatically change how landlords deal with tenants on benefits. According to a survey by the National Landlords Association (NLA), half of tenants don’t understand the system and many landlords might not be on top of the changes either.

Whilst there are many landlords who would rather avoid letting out to tenants on benefits in the first place, this is not always the case. Much of the reasoning behind the decision is simply down to the complexity of letting to people on benefits and the problems landlords might be faced with if they choose to do so, while some landlords may not be able to do so due to the conditions of their buy-to-let mortgage or landlord insurance. Another study by the NLA found that 61% of landlords had tenants on Universal Credit who struggled to pay rent.

However, there continue to be many landlords who do let out to tenants on benefits. This might even increase now that Universal Credit will cover all benefit payments. So what can landlords do to maintain good relationships with tenants on Universal Credit? 

Engage With Your Tenant Right From the Start


Universal Credit places the responsibility to pay the rent directly on the tenant, unlike under the old benefit system. For landlords it’s important to understand the many ways tenants might struggle to manage their money and therefore, it’s important to create a good relationship with the tenant.

To do this, landlords should engage with tenants right from the start and begin to build a good relationship with them. Assess the tenant’s needs and help them understand the responsibilities they have as a tenant.

As the NLA survey shows, it’s important to talk openly to your tenants and help them understand how the new system of direct payments works. You want to explain how to manage and pay rent, making them fully understand the importance of avoiding rent arrears.

When you engage with these issues early, it’ll be easier to deal with them and to come up with different solutions to solving any problems that might arise. It will always help to have a good and open relationship with your tenants whether or not they are in receipt of benefits. 

Consider Setting up Direct Debit Payments


You should encourage your tenants to set up Direct Debit payments to guarantee you get your rent on time and potentially avoid problems with late payments and rent arrears. The problem is that many tenants might not have a bank account or face difficulty in setting one up.

You can help your tenants to set up a bank account and find services that don’t have high bank charges associated to them. Talk to them about how Direct Debit payments might help them in terms of managing their finances. Landlords can also use services that help them set up these systems while also providing a lot of help and information to tenants. 

Be Approachable and Willing to Find Compromises

Often when people are faced with financial difficulties, they might become unwilling and feel unable to confront them head-on. Landlords should be proactive with their tenants to avoid tenants from becoming encumbered with their financial problems. If you are approachable and understanding towards your tenant, they are more likely to engage with you as problems in payments might start appearing. The earlier you are aware of these, the less damage late payments might cause because you can sort them out earlier.

This also requires a willingness to compromise for a suitable solution. Try to listen to the reasons behind late payments and talk with the tenant over ways of sorting out the situation before it gets out of hand. For instance, the use of a Guarantor could be a great solution to provide you with a peace of mind and it could further help the tenant to accept responsibility. This should be something you sort out at the start of the tenancy, so while you can still choose to work with the tenant to help them out you do at least have the fall-back of getting your rent from the tenant’s guarantor.


Landlords shouldn’t be scared to take on tenants on Universal Credit. The best thing to do right now is to understand how the system works and to understand the individual cases of your tenants. Open and honest communication along with the willingness to help are important ways to nurture your relationship with your tenants.

Upad Landlord Club members get access to a Universal Credit Helpline, which can help you to understand Universal Credit and prepare you better for dealing with tenants in receipt of this.

Find out more about the Upad Landlord Club

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By Sandra Mpouma
24 Jan 2019

Categories: Property Management, Housing Benefit



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