One in three landlords say no to housing benefit tenants

Tuesday 19th June 2012

One in three private landlords have either made up their minds that they will stop taking housing benefit claimants as a result of the Government’s welfare reforms, or are actively considering it.

Almost the same proportion say they have housing benefit tenants in arrears, although nine in ten tenants say they are up to date with their rents. However, a number of tenants have taken extra jobs to fund the difference between the rent their landlord charges and the reduced benefit they now receive.

The findings are in a new report by the Centre for Regional Economic and Social Research at Sheffield Hallam University, commissioned by the Government, which seized on it as proving that many scare stories about the controversial housing benefit reforms were proving unfounded.

Local Housing Allowance, the housing benefit paid to claimants living in private rented accommodation, has been capped at between £250 and £400 a week, depending on the property size, up to no more than four bedrooms.

LHA rates are now also set in line with the bottom one-third of rents in the local area – which may be less than £400 for a four-bed property.

The caps for new claimants came into force in April 2011, and for existing claimants in January this year.

Hallam’s research among landlords and tenants was carried out last autumn, and so does not measure the impact on existing claimants. However, the research project will continue until June next year, with further reports to be published later this year and in 2013.

The report says that 33% of 1,867 landlords questioned said they were either planning or considering ceasing letting to LHA claimants.

More than a third (36%) said they have tenants in arrears because of the LHA changes, and 29% said they have taken action to evict tenants or to end their tenancies.

However, the surveys also showed that 90% of LHA tenants are up to date with their rents. More than a quarter said they have looked for a job to make up the difference between their LHA cap and their actual rent.

Lord David Freud, welfare reform minister, said: “The research gives us an early insight into what is really happening, and it shows that the many scare stories about the effects of housing benefit reform are simply not materialising.

“We have capped housing benefit so that people can no longer claim over £100,000 a year to live in large houses in expensive areas of London. This is the right and fair thing to do.”