Does Universal Credit contribute to Affordability Calcs

My tenant just failed the references, specifically. Affordability Calcs (Credit rating fine). It has calculated Earnings currently too low to cover rent it, but it didn’t take into consideration any of his Universal Credit he and his wife get. Is this normal - why to include?? Thanks!!

Hi Rachel, it is normal for referencing companies not to include benefit income in the affordability calculation. Remember, however, that referencing is just a tool for finding out more information about tenants. You can still let to tenants who fail referencing if you are satisfied they can afford the rent.

The reason some referencing companies decide not to count benefit income is that referncing is a gateway product. If tenants pass (or provide guarantors who pass), then the landlord will be able to buy rent guarantee insurance. Referencing companies therefore have an incentive to ‘fail’ tenants they believe to be more at risk of getting into rent arrears so that they are less likely to pay out on the policy.

Clearly, this is problematic as it makes finding a home much harder for people on benefits and it also implies that benefit income is more risky than earned income. While many advocates of benefit reform would agree benefits have been made intentionally hard to claim, it is still not clear to many people why benefits are ‘more risky’ than income through work.


The concern with benefit claimants is due to rent payment being made to the claimant. If the government is prepared to give cash to the claimants, I don’t see any reason why they would object paying the rent element directly to the Landlord.

Perhaps the government is the cause of the problem for people on benefits.

Maybe Landlord associations can lobby the government on this. Not all landlords are bad or have massive portfolios, but some just want to protect their investment and earn some return from it.


they started paying direct to claiment “to teach them how to handle their finances by giving the tenant control” or similar words… .I remember when it happened i decided right away I would never Rent to such claimants and I never have, never will. Neither will my children.The system is not trustworthy

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Sam… people on benefits are more “risky” because the goverment has the opportunity to pay landlords directly . but wont do it ,So when a claimant receives a large payment MAYBE the last thing on their mind is First the rent. As landlords we will NEVER be rid of this fear

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