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Written by rosalind renshaw

Councils will be able to protect private landlords who have tenants on housing benefit from the government’s new regime for two years, it has been announced.

It means that councils will be able to make direct payments of local housing allowance (LHA) to landlords in exchange for them agreeing to lower their rents, for this period.
After that, LHA will automatically be paid direct to the tenants.

But the British Property Federation lashed out at the arrangement, calling it worthy of ‘Del Boy’.

Changes that will see LHA capped at £400 a week for new tenants in private rented accommodation are among LHA reforms that came into effect last Friday. LHA will not exceed £250 for a one-bed property.

Landlord groups have consistently called for LHA tenants to be able to choose to have their benefit paid to them or direct to their landlords. But the Government has decided against this, offering the two-year deal instead.

The British Property Federation questioned the two-year deal.

It described it as a move that would see council staff having to wheel and deal with local landlords to reduce their rent in return for the comfort of getting paid direct.

Ian Fletcher, director policy at the British Property Federation, said: “This is ‘Del Boy’ benefit policy – seeking to trade a landlord’s right to be paid with the Government’s desire to reduce its expenditure.

“If this was really about protecting tenants, why limit it at two years, and not give an ongoing commitment to direct payment up until housing benefit is absorbed into Universal Credit?

“Landlords should expect to get paid for the housing they provide. That shouldn’t be contingent on lowering rents, or having to wait eight weeks under the current system.

“The Government would not dare treat other small businesses in such a way, but seems to think it is acceptable to allow people to rack up huge debts and treat landlords so badly.”

Comments

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    Well said Neil. It has been an outragous state of affairs particularly in London where the rents paid by LHA have been simply stupid. A while ago a well dressed middle eastern man came into our office, after first parking his nice mercedes outside with a disabled badge in the window.

    He was looking for a flat for £800 per week and has been residing in a flat for the last 10 years paid by the council at the same rate. This is over £400,000 in rent not to mention the additional benefits he had been receiving. Personally I feel that the welfare reform in terms housing benefit has go no where near far enough. With people considering a benefits as a life style choice rather than a benefit for those who fall on hard times and have paid into the system.

    • 05 April 2011 17:39 PM
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    Nell, I think you may have misunderstood. Although this may well be the case in London, however up here in the wilds of Hertfordshire, the benefit cuts are actually going to have benefit tenants not being able to afford anywhere the average rental price of properties, that any working tenant can easily afford. So far none of my landlords who current accept housing benefit are will to lower the price just to get the rent direct for 2 yrs, when they can stay at the current rent or even get a little more from a tenant in employment.
    The point has already been raised, what happens after the 2yrs when rent is then paid to the tenant, there is no guarantee they will pay their rent.

    People in receipt of benefits will find themselves unable to rent in the private sector.

    • 05 April 2011 15:50 PM
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    What a bunch of morons these people are to think they might get away with such a stunt. Blackmail is a polite term for this one but I cant think of one stronger without Ros removing it from the posting.

    So lets look at this, at the end of 2 years the rent stops coming in and the tenant gets the notice and goes to the council who advise hi/her to stay on until the bailiff calls. Then the whole process starts over with some other poor unsuspecting landlord!

    This sounds like a great system to be housed at no cost to me.

    Is this why we credit score and identify people to avoid this sort of mess? And we as a proffession get hauled over the coals because of what we choose to do. I think we do a great service to our landlords but the same could not possibly be said about the local councils.

    What a shower - and we have them running our country. No wonder England and the rest of the world are in such manure. Dont forget what is being spent abroad to help other nations - now that's something to get the taste buds going.

    • 05 April 2011 11:27 AM
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    My understanding of the legislation is to specifically put downward pressure on Housing Benefit rents to bring them in line with the rents affordable by working tenants. What is all the fuss about?..... other than some private landlords complaining when they lose what is effectively a Government subsidy whilst other Landlords who rent to working tenants have already sufferred the pain of reductions due to the economic climate. Thank goodness the days of the unemployed being able to "afford" better quality housing than those working are over

    • 05 April 2011 11:16 AM
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    Blackmail. I wonder what they would say if the rolls were reversed with my business rates.... out comes a rather big stick is the answer.

    • 05 April 2011 10:08 AM
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    Until LHA was introduced all payments were made direct to the Landlord or agent. Now they are trying to give back what they had took away and hope that they can use it as a negotiating tool to get Landflords to come down to the now reduced LHA payments rates. Some chance!

    • 05 April 2011 09:10 AM
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