A Croydon-based software company, Caridon Landlord Solutions, says payment times will be reduced from three weeks to two days with the launch of their new online system later this year, developed alongside the Department of Work and Pensions (DWP).
Currently, landlords need to submit a UC47 form and apply for the Alternative Payment ArrangementsSystem (APA), which have been receiving feedback regarding the long processing time and inconvenience. To apply for APA, it needs to be proven that the tenant on Universal Credit has trouble paying their rent. This is called a Managed Payment to Landlord, and they are dealt with by the DWP on a ‘case by case’ basis.
According to Amber Rudd, Secretary of State for Work and Pensions, One-third of UC claimants in social rented housing have their rent paid directly to their landlord. But in the private sector, that number is just 5%.
“People in the private rented sector already face a far higher risk of losing their tenancy, and I know from talking to claimants and landlords that the current system isn’t working for some of them. So we need to make it easier for tenants in the private sector to find and keep a good home, by giving landlords greater certainty that their rent will be paid.” says Rudd.
The software company, who partnered with DWP to develop this system, works with private landlords, letting agents and housing associations to help them regain DWP payments, says the UC47 forms have been the main cause of problems with Universal Credit within the Private Rented Sector.
Sherrelle Collman, Managing Director of Caridon Landlords Solutions says, “We have been working with DWP to develop an agile online system, making suggestions for adjustments to ensure it is as user-friendly and efficient as possible.
“Landlords are now receiving confirmation of direct payments within 48 hours which is such an incredible improvement.”, says Collman.
Given around a third of Universal Credit claimants are private tenants, that means around 2 million people could start paying their rent directly to landlords in the near future. The new scheme could give landlords much greater confidence and ensure tenants have better assurance as their rent payments will be met. It could also make it more accessible for Universal Credit claimants to find private landlords who will accept them.