LHA landlords are not cutting rents, despite PM's claims

Tuesday 21st February 2012

Only a handful of landlords with tenants on Local Housing Allowance are accepting lower rents in exchange for getting rent paid to them directly.

The magazine Inside Housing, spurred on by a claim in the House of Commons by David Cameron that private rents are falling as a result of welfare reforms, used Freedom of Information requests to ask every council in England.

Of the 204 authorities that responded, only 36 reported any rent reductions in return for direct payment of LHA. Of those 36, 12 reported a combined total of 65 landlords cutting rents.

Cameron had claimed in Parliament on January 11 that “rent levels have come down, so we have stopped ripping off the taxpayer”.

He was apparently quoting data from LSL which – until now – had been quoting falling private rents. However, the LSL data makes no reference to LHA rents.

In an attempt to get landlords to lower rents, councils have temporary powers to pay landlords, rather than tenants, the LHA in exchange for lowered rents.

However, the Inside Housing survey suggests that most landlords are not remotely tempted – in keeping with warnings from landlord associations that most landlords would rather re-let their properties at the full market price to non-LHA tenants, and can do so in the current climate of high rental demand.

Labour’s shadow housing minister Jack Dromey is to raise the matter in Parliament.