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Ministers urged to support better landlords to avoid looming housing crisis

This flies in the face of government’s key argument in favour of the changes – that landlords would reduce their rents in line with housing benefit cuts – and suggests that the high demand for homes in many areas will simply prompt landlords to instead let their properties to paying tenants.

The survey from the British Property Federation found that more than 85% (85.6%) of landlords would not reduce rents to retain existing housing benefit tenants and that almost half (43.4%) planned to reduce the number of properties let to claimants against just 8.3% who planned an increase.

The BPF said that one measure that could keep landlords in the housing benefit market is a return to direct payment, where a tenant could request their housing benefit is paid directly to the landlord.

Since the removal of direct payment in 2008 tenants have failed to pass on millions of pounds in rent, prompting more and more landlords to consider leaving the sector, and contributing to 11.7% (£276m) of all UK rent going unpaid in December. The BPF argues that if social landlords faced the same income shortfall they would face significant difficulties.

The figures underline fears articulated by politicians including London mayor Boris Johnson that the cuts would force many households claiming housing benefit to move from their homes – and possibly their jobs – into small pockets of poor-quality housing.

Landlord groups and homeless charities have asked government to reconsider the damaging cuts, and in particular, to stop housing benefit money that should be spent on rent from leaking out of the system. The British Property Federation supports reform of the housing benefit system, but believes current proposals will increase tenant indebtedness – and the resultant burden on landlords and taxpayers.

Ian Fletcher, Director of Policy for the British Property Federation, said:

"Most landlords want to ensure that tenants on benefits remain housed, but with housing benefit rates being cut and little restoration of rents being paid direct to landlords, our figures bear out that many respectable landlords look set to exit the benefit market. Such an exodus would be a tragedy, with more and more claimants forced into a few concentrated areas of sub-standard accommodation. Government should be seeking to work with the private rented sector to stop this happening.

"Paying your way in the world is one of the values that goes to the heart of this coalition Government, yet when it comes to landlords the Government seems prepared to let people on housing benefit get away with living in accommodation rent-free and landlords suffering huge debts. Landlords and taxpayers deserve better than hundreds of millions of lost money each year, which should be being paid out on housing."

Alan Ward, chairman, Residential Landlords Association, commented:

"It is clear that many LHA landlords are still intending to reduce their properties in this sector, about which the RLA has warned for over a year. The fundamental problem of direct payment must be resolved quickly, without a rent reduction. However, if the Minister considers it politically expedient, this research shows that it should be limited to a maximum of five percent to minimize the impact in a sector where margins are particularly under pressure".

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0 thoughts on “Ministers urged to support better landlords to avoid looming housing crisis

  1. G Williams says:

    It is so self evident that a tenant who refuses to pass on their Local Housing Allowance to the Landlord will be made to leave their property that I cannot understand why the Government cannot see this. I have a young mother of 23 with one six month baby living in a spacious well-maintained two-bedroomed flat in Sherborne flat for which I charge less than the commercial average – £490 per month compared with £520 – £580. It is well below the Local Housing Allowance Rate. She is a good tenant from a family who one way or another (including her mother!) have been tenants for many years. They are good people whom I am happy and glad to help. The Local Authority (Dorchester) have seen a way (a fiction, really!) with the teant’s consent of paying the Allowance direct to me. I don’t know whether this is because they recognise that the rent is favourable or for some other reason.
    However, despite my feelings about the family, I am 78 years of age and rely upon the rent: if it were to stop I would not hesitate to repossess. I realise there are many really bad landlords who exploit their tenants and, in many cases, naive Local Authorities with the result that the Authorities are paying out far more than they need. For this reason legislation must protect the Authority – but why, oh why, must it be at the expense of Landlords who TRY to be reasonable and public spirited.