Universal Credit: Hundreds Of Families Facing Eviction As Letting Agent Warns It Can't Cope With Arrears

Tenants told debt risk means 'extraordinary measures' needed

Hundreds of families on Universal Credit face eviction because their landlord says the new benefit will put them in rent arrears, Jeremy Corbyn has revealed.

The drastic move, which was highlighted by Corbyn during Prime Minister’s Question time, will force parents and their children out of their homes in the New Year.

The Labour leader said the eviction notices were yet more proof that the roll-out of the controversial Universal Credit system had to be put on pause.

The boss of the letting agent which sent out the shock letters told HuffPost UK that Theresa May should rethink the benefit and “sort it out”.

Gap Property director Guy Piggott said no thought had been given to the most vulnerable and it was “great” that Corbyn had raised the issue.

The revelation came as Labour’s Frank Field warned the Government it still faced a Commons vote on the benefit tomorrow despite reports that the Treasury was set to reduce its six-week waiting time.

During PMQs, Corbyn revealed that lettings agent GAP Property has sent ‘section 21’ notices to tenants in Lincolnshire, giving them two months’ notice that they may be evicted.

HuffPost UK
The letter sent to tenants.
The letter sent to tenants.
HuffPost UK

The letter, passed to HuffPost UK, states the company “cannot sustain arrears at the potential levels Universal Credit could create (this affects the vast majority of our tenants)”.

Warning its tenants that the new benefit is to be rolled out in North East Lincolnshire on December 13, the letter ends: “This is an extraordinary event that requires both you and us to take extraordinary measures.”

The eviction notice attached to the letter.
The eviction notice attached to the letter.
HuffPost UK

Corbyn revealed he had been passed the letter on Tuesday. “The agency is issuing all its tenants with a pre-emptive notice of eviction because Universal Credit has driven up arrears where it’s been rolled out.

“The letter - and I quote - says GAB Property cannot sustain arrears at the potential levels Universal Credit could create.”

Labour pointed out that the National Landlords Association has found just two in 10 of their members would let to a tenant who receives universal credit or housing benefit. One major housing association also reports the arrears rate for those claiming the new benefit is around three times higher than for other tenants.

Corbyn said: “Blanket notices of eviction handed to tenants because of Universal Credit are totally unacceptable, should shock us all and bring shame on this Conservative Government.”

May again refused to pause the nationwide roll-out of the new benefit, which replaces six different individual benefits with one payment, and instead defended it.

“What we see is after four months the number of people on Universal Credit in arrears has fallen by a third,” she said. “Now it’s important we do look at the issues on this particular case. He might like to send the letter through.”

Jeremy Corbyn in PMQs.
Jeremy Corbyn in PMQs.
PA Wire/PA Images

Guy Piggott, director of Gap Property, told HuffPost UK that the Prime Minister had to act to change Universal Credit.

“It seemed like Theresa May was saying it’s alright, don’t worry. That’s just not good enough in a town like Grimsby. It’s so poor here, the average wage is about £17,000.

“My message to Theresa May is this: ‘You’ve got to sort it out. Consider what it does to a family living hand to mouth. Imagine if you’ve got no savings, if all of your money stops and from the middle of December your next pay is February, what would you do about feeding yourself, keeping your house warm?’

“It’s great Jeremy Corbyn has raised it, he’s done the right thing in alerting people. I agree the welfare state needs to be reformed but you have to do it in a more sensitive way. Nobody’s given any thought into how this affects the most vulnerable.

“I’m pleased Jeremy Corbyn said it was a pre-emptive measure. We are not saying eviction will happen, we pointed out the court must make an order. But we want people to know this is coming and they should prepare for it. I was rather hoping we would get a groundswell of tenants saying ‘look something needs to be done about this, we just cannot survive’.

“It sounds selfish we are pointing out the rent element, but we are telling people prepare for this now. If we didn’t give notice now, it could take six months before we can apply to the courts. Universal Credit is coming in here on December 13. They won’t get money until the beginning of February. Of course, it’s come at the worst time, at Christmas.

“I’ve heard of 13 weeks’ delay for it as well. The fact is we can’t subsidise a large amount of tenants if no money is coming in. And our banks unfortunately aren’t very sympathetic.”

Work and Pensions Secretary David Gauke.
Work and Pensions Secretary David Gauke.
PA Wire/PA Images

Piggott, who is also chair of the local Humber Landlords Association, insisted he did not want to evict anyone but may be left with no choice.

“Unfortunately I can see how I can be painted as a villain in this. We are not trying to alarm people, we are trying to inform people. We are saying you won’t have to leave as long as you pay your rent. Ring us come and see us. We didn’t send out the letter in isolation. In a way it’s had the desired effect, though I didn’t quite see it going this way.

“The only thing I’d do differently is I’d highlight as long as you pay your rent you won’t have to leave, and this is not meant to alarm you, it’s meant to inform you. I didn’t want to alarm anyone, I just wanted people to start sitting up and listening.”

He said that his firm had effectively been forced to publicise the new benefit because the local council and job centres had done nothing.

“Some of tenants said ‘what’s this Universal Credit? Never heard of it’. I’ve had somebody in this morning saying ‘why have you sent me this? This doesn’t affect me’ but she’s getting working tax credit so it does. People think it’s just housing benefit, it’s not. The local authority has done nothing here.

Great Grimsby Labour MP Mel Onn, who passed the letter to Jeremy Corbyn.
Great Grimsby Labour MP Mel Onn, who passed the letter to Jeremy Corbyn.
PA Archive/PA Images

“Our job is to rent property out. It’s not to throw people out of houses, it’s counter-productive. What we do have to do is make sure the rents come in so that we can pay our way, pay the loans and pay for people to come in and do repairs and suchlike.

“We didn’t know it was coming live here until last week. It’s really poor the information we’ve been given locally.

“People may end up with a handful of money in their hand and say I’m paying for something else [than rent] out of that. Even if people end up £500 adrift, it could take them a whole year to pay that back.

“We spoke to DWP middle of last week, who said it will only take six weeks. They will be without benefit for just six weeks. But a lot of people here live hand to mouth and they can’t sustain six weeks with no money coming in. These people don’t have any savings, they have no buffer when the money stops they won’t have the money to feed themselves.”

But Tory MP Mims Davies hit back at Corbyn for raising the case.

“Jeremy Corbyn has taken the scaremongering on Universal Credit to a new level and now it has come to Labour’s doorstep to roost: tenants being threatened with eviction based on fear not evidence,” she told HuffPost UK.

“This pre-emptive action is a symptom of the hysteria that Labour have been spreading about Universal Credit.

“Only a few weeks ago, Jeremy Corbyn wrongly said in the House that one in eight tenants of Gloucester City Homes had been evicted when in fact it was eight in total who were evicted for various reasons unrelated to Universal Credit. A point of order was raised but Jeremy Corbyn neither corrected the record nor apologised. Instead of scaremongering, Labour should be directing people to get an advance and other help available through Universal Credit.”

Work and Pensions Select Committee chairman Frank Field
Work and Pensions Select Committee chairman Frank Field
PA Wire/PA Images

Earlier, Sky News reported that Philip Hammond was set to announce in the Budget a plan to reduce the Universal Credit waiting time from its current six weeks.

The move was seen as a bid to fend off Tory rebels, who have been lobbying hard for a cut in the delays.

But Frank Field told HuffPost he was not backing off his backbench debate on Thursday, which demands the waiting time is cut to a month.

“It is so important for the Government to implement this proposal in full, as the first stage of a rolling programme of improvements to Universal Credit, to ensure it doesn’t flatten our constituents over Christmas and kick them towards destitution,” Field said.