Research, carried out by BDRC Continental’s Landlords Panel, has been published today that has revealed that 15% of private landlords are going to stop offering Local Housing Allowance (LHA) tenancies. This has come as a result of the government’s cap on payments.
The research has indicated that changes to LHA payments, which were applied on 1st April 2011, are to have a significant impact upon private landlords operating in the sector. Key changes to the LHA scheme have included a reduction in the maximum size allowed for a property from five bedrooms to four, and, capping the maximum LHA rates.
One in four private landlords, all of which will have invested in a Landlord Insurance policy, have reported that they are now looking to reduce the amount of LHA tenants in their portfolios, whilst 32% are looking to do the same when capping affects their lettings.
Meanwhile, Mark Long, Business Propositions Director for BDRC Continental, has been quoted as saying: “The predicted demand for privately rented accommodation has risen since the first quarter of 2011, with LHA claimants accounting for 35% of tenants in the sector. However, the proportion of LHA claimants has already dropped by 4% since the first quarter of 2011 and a significant number of private landlords are saying they will respond to the capping of the LHA scheme payments by withdrawing from that sector of the private rental market.”
He then went on to add: “It will be interesting to track the impact of LHA capping as it plays out across the private rental sector.”
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