New universal credit system will make a big difference on landlords who will now be receiving their tenants housing benefits direct. The changes were announced by Iain Duncan Smith on welfare reform in The House of Commons.
Housing associations are afraid that it would be too risky if tenants will receive the credit directly. and although the way how to secure landlord’s income is not yet specified in detail, it’s believed to be a better idea anyway, as the proposed changes give possibilities to use direct payments and direct debits.
The creators of those changes explain and underline the benefits for both sides affected; what is more, if anyone would feel that the changes are adverse and cause any kind of financial losses to compare to the old system, they will receive extra payments to balance it.
Mr Duncan Smith said: “We will financially protect those who move across to the universal credit system. There will be no losers”.
The other changes in welfare reform mentions those claimants who refuse to accept job or refuse to attend compulsory unpaid community work. Anyone mentioned above will lose the benefits which they are entitled to for appropriate period of time, which starts from three months if they will refuse an offer once, six months if they will refuse it twice and even for up to three years if they will refuse three times.
All those changes are expected to save £1 billion a year and decrease the number of jobless households.
The new credit system might be beneficial for those who’ve been planning to take a step into or move up on property ladder. They can find this as the most suitable time to rent out their current property and become a landlord with landlord insurance and finally buy a new house.