Would universal credit increase to cover a rent increase?

[SunnyUpNorth]

Just wondered if anyone knows if someone received universal credit and their rent is increased would the UC increase accordingly to cover part/all of the rent increase?

We have a lovely tenant in a house we rent out. She’s been there for about 5 years and we have never increased the rent, in fact I think we dropped it for her when she moved in as she’s a single parent. She works in a min wage job and receives UC. Her rent is Al over 25% below current market value for the area. I don’t want to affect her finances by increasing the rent, but wondered if we did increase it a little would she be able to get more money towards it from UC?

Our mortgage is due for renewal in about 3 months and will go up by a couple of hundred pounds a month. I’m only thinking of increasing her rent by around £25-50 per month.

Wow, you don’t ask for rent in December?! That’s amazing.

I can see that this might not be sustainable if your mortgage payments increase though, you'll essentially be subsidizing your tenant to live here.

I wouldn't see it as subsidising. When you have a good tenant being a landlord is an very easy way to make money in terms of effort/yield. OP borrows money to buy a house, tenant repays most of the loan, OP owns the house at the end. Even if OP pays some of the loan back herself, if the bulk is covered by rent after costs are factored in there is usually still considerable profit.

I dont think there is an exact amount of rent or increases that is right/wrong. It's not earned income for work where inflation is relevant in my view. It's an investment that makes money from people's basic need for a home so requires a level of ethics that sticking money in a savings account doesn't. Which I think is what OP has realised in managing it so well.

My thoughts are that a maximum increase of around 5% - or a staged approach, and good notice feels like a responsible way to treat someone.

@Autumngardenplans What I mean is that if mortgage payments go up by say £200/month and they continue to make December rent-free, that’s a lot of extra money to find to cover the mortgage. Yes, they can eventually sell the property, but they have to find that extra cash right now.

It’s an unusual situation for sure, but I agree that if they want to keep this tenant, they can only raise the rent by a small percentage.

You're not a charity OP. It's perfectly reasonable to increase the rent by a small amount, especially when it's so much under market rate

You seem like a reasonable landlord. So i’m just going to present a different way for you to see the world:

i dont know the answer to your Q but if UC wont suffice, it’s just a couple of £hundred for you alone to keep a second property. I mean, that shouldn’t be madness for any landlord and this idea that landlords need to keep costs down to zero is a bit ridiculous.

also why should tax payers pay for you to keep a second property via UC anyway?? Because that’s what you’re really doing if you think about

you should just take the “hit” which isnt a hit if youre a business person. Youve been making profit and It’s pretty cheap to have a second property for about 200 quid every month, so dont punish your tenants for it and tax payers. Although i see youre trying youre best not to and probably didn’t think about it the way i’ve framed it.

@whyisitallsohard you ask why the taxpayer should pay to keep a second property for the OP. That’s disingenuous. The taxpayer isn’t doing the OP some great favour, the taxpayer is paying to provide the tenant with somewhere to live. More pertinent questions are why is the taxpayer subsiding a working age healthy adult, and why is the taxpayer funnelling that support through the private rental sector and not through social housing.

@Secondwindplease Yes, it all boils down to lack of social housing. From what the OP has said, the tenant can’t afford to rent this property unless the OP keeps the rent 25% below the area average and gives her a rent-free month every December. If they can’t continue to do this or decide to sell the property at some point, where will she go?