More than half of private landlords are planning to cut down on letting to tenants on housing benefits.
The finding is in a survey by the National Landlords Association and comes as the Welfare Reform Bill reaches its report stage in the House of Commons.
A key part of the Welfare Reform Bill is that Local Housing Allowance, which is paid direct to tenants on housing benefit, will be reduced from average market rents to the bottom 30%.
The poll questioned landlords about LHA, with 58% saying they would have to cut the number of properties they let to benefit recipients. In total, 90% of these landlords plan to do so in the next 18 months, with one-third stating they would be reducing their LHA properties immediately.
More than 80% of landlords expressed concern about the reduction of LHA rates and the same number of landlords were also worried about future LHA increases being linked to the Consumer Price Index rather than true market rents.
The survey found that 90% of landlords stated that they cannot afford to reduce their rents to absorb changes to LHA. The large majority of landlords said this was because they are faced with mortgage repayments and rising running costs.
David Salusbury, NLA chairman, said: “These findings are concerning as they indicate that cuts to LHA benefits are forcing landlords out of this part of the rental market.
“The private rented sector is playing an increasingly important role in providing accommodation to housing benefit recipients in the UK. The Government is implementing cuts which, this survey tells us, is likely to lead to an increasing number of people struggling to pay their rent.
“The NLA believes there is a risk that the Government’s policies will result in fewer affordable rental properties available to vulnerable families across the UK, especially as the number of people claiming benefits continues to rise.
“Benefit payments must ensure that LHA tenants are not left at risk and that landlords providing this much-needed housing can cover their costs.”
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Comments
Based on all above and my similar bitter experiences NEVER; NEVER, NEVER let to LHA claimants.
Unless you get 2 months in advance as a deposit and 1 months rent in advance.
That is what I now do for private tenants having lost over £85000.00 these past 4 years due to wrongun tenants;
3 of them LHA claimants.
Also obtain RGI and legal expense insurance via LRS or any other providers; only costs about £10 per month per property and also use the services of tenantid and landlordreferencingservices.
That is the only way to avoid being stitched up by wrongun tenants.
There are more than enough decent private tenants than to resort to LHA scum.
With the landlord referencing services I have mentioned there is less liklihood of us landlords being stitched up by the wrongun tenants as the services allow LL to communicate with eachother.
The more tenants know they cannot behave in the old ways ; the more they will appreciate that a good tenant profile will become as valuable as a good credit rating.
That should ensure tenants comply with their AST conditions which will ensure LL may give a decent reference which will become increasingly valuable as these tenants won't have anywhere to live if they stitch their LL up.
There will be increasingly a pool of tenants who will not be able to source rental accommodation due to LL now talking to eachother via these referencing sevices.
A normal credit check is a waste of paper as private LL are not allowed to apply information relating to a tenancy on credit files.
Hopefully tenants will realise that they must behave themselves or face the risk of being permanently homeless as their information about their conduct will increasingly be shared by LL who become aware of these new networking services which are to date all free.
Most of us LL are just trying to provide decent accommodation at a fair market rent and it seems the law is stacked against us with tenants ; seemingly with impunity being able to trash; steal items and not pay rent and then move onto another LL and do the same thing again. The police aren't interested. Surely as Thatcher once said Crime, is cime ,is crime!!?
That is why these new network referencing services are so useful to us LL.
If every LL applied details of their tenants both good and bad we could potentially reduce LL losses to substantially reduced amount.
Tried LHA tenants twice. Never again. I had permission to speak to HB regarding payments. They both defaulted. I had to evict them at cost. The bond was worthless as the Council would not cover damage, even against their own photographic evidence. Somebody in the department also coached them on how to avoid paying. I won't go into details as there are some tenants who are still not aware of methods to short the Landlord. Don't even consider it.
You can request that the rent is paid direct to you if the HB tenant is 8 weeks in arreas so while you are waiting is best to email HB requesting that rent is paid direct to you.
Also most LA offer Bond deposit scheme which most HB tenant don't know about so it is best to find out if this is on offer.
Also make sure that you have rights to speak to HB regarding payments. There no point if the tenant does not offer this.
regards
I am in the process of interviewing for new tenant(s). I could have let the house about a dozen times if I had been prepared to reduce the rent to housing benefit level.
However, there is also the problem that I require the rent to be paid in advance - and HB is paid in arrears.
Plus the issue of a deposit. Many HB claimants simply cannot afford one
Also, I am told it can take up to six weeks or so for the benefit payments to be put in place. Unfortunately, I really cannot wait that long. Should I be prepared to allow the tenant to move in before HB is arranged? Hmm - tricky !!
I might add that I do already have two properties with HB tenants. One pays a low rent - within the new guidelines. The other had her benefit arranged before the change in the rules. But our dealings with the HB office have not always been easy, and I am not keen to go through that again especially for a reduced amount.