Over three-quarters of private landlords who currently accept housing benefit tenants are set to be forced out of the market, unable to afford to continue letting to those on lower rates of Local Housing Allowance.
A new survey of 528 landlords in October by the National Landlords Association has found that Government caps being rolled out on housing benefit payments will have a serious effect on tenants reliant on LHA.
The first cuts, affecting new tenants, came in last April, and the second round, affecting existing tenants on LHA, are due to be implemented in the New Year.
The survey found that 77% of landlords who have LHA tenants are either considering or already taking steps to reduce their involvement in the LHA market.
A quarter of respondents say they are already reducing the number of tenants they have on housing benefit payments, while half plan to do so in the future.
NLA research has found that the LHA cuts will have a varied impact on families across the country, with some losing very little but others losing hundreds of pounds.
Government figures show that nearly 1.3 million households currently claim LHA across the UK.
Some examples of how the caps will reduce LHA payments, based on rates from March 2011 before the cuts began in April, are:
• A one-bedroom flat in Willesden, north-west London: before the cap, the rate was £275 per week, now it is £250 per week – a £25 cut per week.
• A five-bedroom house in Guildford, Surrey: before the cap, a family would have received £691.15 per week, now it is capped at the four-bedroom rate of £400 per week – a £291.15 cut.
David Salusbury, NLA chairman, said: “The shortage of housing across the UK is putting even greater pressure on the private rented sector. Capping housing benefit payments at this time will only lead to more people struggling to pay their rent.
“The Government must monitor the impact of the roll-out of LHA caps. It is essential that tenants are not left at risk and that landlords can continue to provide this accommodation for the more vulnerable in society.
“The number of people claiming benefits continues to rise, and these caps could result in fewer affordable rental properties for benefit claimants.”
Comments
Where do you sign up to LHA tenants with guaranteed rent/repairs inc/management/social concience??? If it does exist where do I sign???
@Donnie
Sorry don't understand this post at all are you confusing simple LHA (HB) payments with guaranteed income schemes such as LAs taking PRS stock on agreed deals?
Where does a LL with a LHA teant get g'teed rent/repairs/management from?
"I can't understand why landlords still get involved"
Try guarenteed rent/repairs inc/management/social concience etc.
Also where do you propose the 975,000 displaced households would live?
Quite right too that they should pull out.
Had a flyer from a client which he got from his Nationwide Building Society BTL provider offering a £20 discount if you buy their insurance.
The first line of the flyer states:
'We do not offer cover for DSS tenants, holiday homes and long term unoccupancy (over 60 days).'
These restrictions have been around for some time now so I can't understand why landlords still get involved - unless you know better of course.