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Will Buy to Let landlords say 'no' to housing benefit tenants?

Personal_Finance / Buy to Let Apr 18, 2007 - 11:58 AM GMT

By: Submissions

Personal_Finance Amy Watson writes: Private sector landlords are being advised to refuse tenancies to housing benefit claimants.

The Residential Landlords Association – which represents members owning over 100,000 private rented properties throughout the UK – is advising them to remove their homes from that market.


And the reason lies in the new-style Local Housing Allowance which is now handed direct to claimants instead of paid to their landlords.

The trouble is … the money is often spent on other priorities instead of paying the rent.

“And there are no winners from a situation that just encourages more rent arrears,” says RLA chairman Lee Dribben.

“Landlords can't afford to take that sort of financial loss on a routine basis while they chase defaulting tenants who have already spent their rent allowance on other things.

”Vulnerable low-income tenants, who already have difficulty managing their money, are being driven further into debt.

“And the resulting withdrawal of affordable private sector rented housing from the claimant market would shift crippling pressure onto the public sector.

“Yet, in the face of this so-called reform, I can see little alternative than for professional landlords to quit the housing allowance market altogether.”

1/2: more …

The RLA is a longtime campaigner for the government to re-think its controversial change in housing benefit payments because, says Lee, “the rules are too rigid. They don't allow tenants to opt for rent money to be paid direct to landlords – which would, largely, solve the problem.”

The reform was originally intended to safeguard against fraud and provide people on low incomes with more personal responsibility for paying their rent.

But, within months of the new system being phased-in, a Department for Work and Pensions report revealed that 77 per cent of landlords with claimant tenants were reporting arrears and 56 per cent were, as a result, turning away from renting to claimants.

“Yet the government does not seem to have heard its own warning,” says Lee. “It was a bad idea that few people wanted and it needs reversing before this particular housing crisis passes a point of no return.”

Housing allowance payments are among several issues on which the Residential Landlords Association is campaigning. They include lobbying for the formal acceptance of a Code of Practice laying down expected standards for professional landlords, a common sense approach to the implementation of Housing Act licence conditions and fees relating to houses in multiple occupation, as well as a re-think on fire safety regulations, amenity standards and the Tenancy Deposit Scheme.


• The Residential Landlords Association is a leading national organisation for professional landlords, residential property investors and self-managers – with members owning over 100,000 properties in the UK private rented sector. The range of members' services - on www.rla.org.uk - includes legal advice, insurance, financial services, credit referencing and training. For tenants there is www.tenantdocs.co.uk – where tips include a download of the RLA's award-winning Plain English tenancy agreement. The RLA operates a web-based property search on www.homes2rent.net and publishes the bi-monthly Residential Property Investor magazine.


By Amy Watson

Notes

For further information and interviews please contact

Brian Johnson at Powell Communications - tel: 0161 828 5400, fax: 0161 839 5414;
e-mail: brian.johnson@powell-pr.co.uk

Graham King – tel: 0161 976 2729, fax: 0161 976 2758, mobile 07850 280213;
e-mail: graham.king@powell-pr.co.uk


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