Tuesday, 14 June 2011

Half of landlords will cut back on letting to benefit tenants

More than half of private landlords are planning to cut down on letting to tenants on housing benefits.

The finding is in a survey by the National Landlords Association and comes as the Welfare Reform Bill reaches its report stage in the House of Commons.

A key part of the Welfare Reform Bill is that Local Housing Allowance, which is paid direct to tenants on housing benefit, will be reduced from average market rents to the bottom 30%.

The poll questioned landlords about LHA, with 58% saying they would have to cut the number of properties they let to benefit recipients. In total, 90% of these landlords plan to do so in the next 18 months, with one-third stating they would be reducing their LHA properties immediately.

More than 80% of landlords expressed concern about the reduction of LHA rates and the same number of landlords were also worried about future LHA increases being linked to the Consumer Price Index rather than true market rents.

The survey found that 90% of landlords stated that they cannot afford to reduce their rents to absorb changes to LHA. The large majority of landlords said this was because they are faced with mortgage repayments and rising running costs.

David Salusbury, NLA chairman, said: “These findings are concerning as they indicate that cuts to LHA benefits are forcing landlords out of this part of the rental market. 

“The private rented sector is playing an increasingly important role in providing accommodation to housing benefit recipients in the UK. The Government is implementing cuts which, this survey tells us, is likely to lead to an increasing number of people struggling to pay their rent.

“The NLA believes there is a risk that the Government’s policies will result in fewer affordable rental properties available to vulnerable families across the UK, especially as the number of people claiming benefits continues to rise.

“Benefit payments must ensure that LHA tenants are not left at risk and that landlords providing this much-needed housing can cover their costs.”

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