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Fewer landlords are letting to tenants in receipt of housing benefit

There has been a notable drop in the number of private landlords letting to tenants in receipt of local housing allowance or Universal Credit, according to the National Landlords Association (NLA). 

A number of landlords have been deterred by the freeze on Local Housing Allowance (LHA) rates, introduced in 2016 by then-chancellor George Osborne, replacing the existing regime which saw LHA rates broadly cover the cheapest third of rents within the government’s broad rental market areas. 

But as rents have increased over the years, so has the disparity between what claimants receive in housing benefit and the amount they have to pay towards rental payments. 


Although the government announced this week plans to end the LHA rate freeze after four years from April, the proposed increase is simply not enough to help those already unable to afford their rent.

Payments, which are based on private market rents being paid by tenants in the broad rental market area (BRMA) - within which a person might reasonably be expected to live - will rise by inflation, which currently stands at around 1.5%, from the start of the new tax year.

Given that rents have risen by an average of 5%, and in some areas more than that over the past four years, a 1.5% hike in the benefit level is going to be of minimal benefit to a tenant struggling to afford the rent, according to the NLA. 

Meera Chindooroy, policy and public affairs manager at the NLA, said: “While we are pleased the government will finally end the freeze on LHA rates, an inflation-based increase is insufficient to address the shortfall between LHA levels and market rents in many areas. 

“The financial support offered by the government is simply not enough for many tenants to cover their rent.

“Our research shows that a decreasing proportion of landlords are letting to tenants in receipt of local housing allowance or Universal Credit, and that there is a wide variation across the country. 

“It’s vital the government re-aligns LHA rates with current market rents, in order to ensure vulnerable tenants continue to be able to access properties in the private rented sector.” 

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Poll: Are you surprised that there has been a drop in the number of private landlords letting to tenants in receipt of local housing allowance or Universal Credit?


  •  G romit

    Other than politicians is any one surprised by this!

  • Matthew Payne

    Whilst I appreciate the NLA possibly wants the attention focussed on this point alone whilst they lobby the government to remove the freeze, I hope behind the scenes they do completely understand what is actually driving decision making.

    As I posted on another article yesterday, whilst yes it could be a contributing factor where LHA rents have been frozen for 3 years, it is naive to think this is the main reason for Landlords or as importantly their agents being deterred by this alone. There are some significant other factors which would still deter them even if LHA rents were set at market levels.


    Legal & Tax Changes The Letting Industry Has Had Imposed In The Last 4 Years (some are currently proposed)

    1. S24 (disallowing of finance costs)
    2. Additional 3% SDLT on property purchase
    3. Premium of 8% CGT when selling property
    4. Banning of letting agent fees
    5. Halving of lettings relief
    6. Prospective banning of ‘No DSS’ wording in adverts
    7. Promised banning of S21 notice
    8. Growing trend of councils charging hefty licence fees per property
    9. Changes to HMO regs including minimum room sizes
    10. Right to rent checks (now shown to be discriminatory and there is no guidance on how to deal with EU immigrants)
    11. Benefit tenants migrated to UC causing lengthy delays in rent payments and often substantial arrears
    12. Deregulation Act
    13. Scrapping of Wear & Tear allowance
    14. Introduction of EPC minimum requirements (even on HMOs) which can be difficult to meet with older properties
    15. Unfit for human habitation legislation
    16. CO detectors must be fitted
    17. 100%+ council tax on properties being refurbished between tenancies. Not even the 25% single person discount
    18. Substantial increases in court costs for use of S8, thus making S21 more popular
    19. Membership of compulsory redress scheme for agents (and most likely for landlords soon)
    20. Limit on amount of deposit we’re allowed to take
    21. Rogue landlord database
    22. Proposed 3 year minimum tenancies though not sure what the value of this would be with the abolition of S21
    23. Some councils now charging council tax on HMO rooms


    @John And there's always the possibility of clawback from councils if the tenant is found to be claiming fraudulently, or their circumstances change and they're no longer entitled to the benefit(s)

  • icon

    Another factor that I have noticed recently is the sheer amount of time it seems to take for Universal Credit payments to come through. I have a couple of tenants who have had to wait 2-3 months for their money to come through after their work dried up, so I have likewise had to wait for them to be able to pay me. I even had to lend one some money for food so that he didn't starve whilst he was waiting, and the other was looking at the same issue when her first payment finally came through. Add to that that they only pay LHA in arrears (as if that is true of the real world) and I am certainly very cautious about the whole thing.

  • icon

    Has the NRLA merger not gone ahead?

    Edit: I've since learned it has been delayed until March.

  • icon

    John McKay, well said you are a star, and then they turn around and complain about the cost of housing that they caused. They have ruined us which was their intention, driven a wedge between LL & Tenant, pretending that they are their friend while making rents unaffordable, it's no use buttering up Tenants while at the same time robbing them with silly regulations, they also have limited means.

  • icon
    • 17 January 2020 03:06 AM

    @Laura Phillips

    You are totally correct to bring attention to the issue of direct payment.
    Most LL who take on DSS tenants seem to be obsessed with direct payment when that is the last thing they should do precisely because of the 'clawback' risk.
    Such direct payment is really only appropriate whilst evicting a DSS tenant.

    Too few LL understand the risks of 'clawback'

    A LL associate was stung for this over 20 years ago.
    He had to repay £13500 of HB!!!
    No wonder LL say No DSS and will continue to say so even more.
    No Govt can ever prevent LL declining DSS tenants.
    All banning the phrase will just mean wasted phone calls for DSS tenants who will be told over the phone No DSS.
    Perhaps the phrase

    Subject to Status will be the new coded phrase to replace

    No DSS!?

    Matthew Payne

    LHA rent is a hot potato, no one wants it to hit their acct first, as it's the first recipient who are subject to the clawback. I stopped renting to LHA tenants after my first clawback, too much risk, and you never know when it is coming, they reserve the right to come after you years later if need be. I am too surprised more LLs are not wise to this and make agents collect the rent, however, there will be fewer and fewer of those prepared to do it either. I am most surprised that HMG doesnt even consider this to be an issue for us all, and to be fair for the tenants as well.

  • icon

    council tax is assessed and levied by hmrc--councils collect the tax only


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