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With the problems of Universal Credit being experienced by a growing amount of claimants, and forcing some into rent arrears and destitution, anti-deposit campaigners are urging letting agents and buy to let landlords to consider deposit free renting.

Recent reports have shown that Universal Credit, which has replaced 6 benefits, has more than doubled the rent arrears of those waiting to move onto the new benefit system. This has presented more problems for many letting agents and landlords. A survey has also shown that the average Universal Credit claimant owes their landlord an average of £662.56, compared to £262.50 for claimants of traditional housing benefits. Data has also suggested that tenant evictions have increased by around 55 per cent in only 12 months, in locations where Universal Credit is being used. The Citizens’ Advice Bureau has also reported an increase of 47 per cent in the amount of renters seeking advice in relation to rent arrears, since the Universal Credit rollout.

The Government is planning for around seven million people to be living on Universal Credit by the close of 2023, but the system has been affected by delays. Amber Rudd, the Work and Pensions Secretary, conceded this month that the system could be better. However, despite Ms Rudd’s promise to learn from past errors and amend the new system, the founder and managing director of Dlighted, a zero deposit rent provider, has expressed his concern. Ajay Jagota has explained that there are positive intentions in Universal Credit to make the benefits system fairer and simpler, but said the implementation of the system is far from simple, with letting agents and landlords alike having to come to terms with this system.

The deposit protection industry often sends the message that traditional tenancy deposits are the only method to keep your rental home safe from arrears. However, in reality, deposits only cover you for around one month of rent arrears, and often landlords and letting agents have no plan if they are owed two or three months rent. As the evidence points to a strong link between rent arrears and Universal Credit, deposits will not protect your income if it suffers when Universal Credit is introduced in your area.

Deposit free renting, Mr Jagota explains, is a method which could become a real benefit to letting agents and landlords who find themselves affected by growing rent arrears, as it would offer protection against unpaid rent, legal fees and property damage, while making it quicker and easier to find new tenants if the current ones have to be evicted.

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