Call for LHA to track local rents as landlords struggle with ‘unprecedented financial challenges’

Call for LHA to track local rents as landlords struggle with ‘unprecedented financial challenges’

0:05 AM, 3rd July 2023, About 8 months ago 3

Text Size

Propertymark has called on the Department for Work and Pensions (DWP) to reconsider its current Local Housing Allowance (LHA) scheme and communicate with landlords more.

Speaking at a recent Commons Committee hearing, the organisation’s Timothy Douglas detailed how the existing level of LHA is affecting the private rented sector (PRS).

Propertymark, along with various other professionals from the PRS including tenants, policymakers and homelessness advocates, were examining the influence of LHA on the housing sector.

They all said that there was a need for the DWP to engage with landlords and acknowledge their vital role as stakeholders in the provision of housing.

By not doing so, vulnerable tenants could be priced out of the PRS as rocketing demand means rents are rising – but the LHA is not keeping up.

‘Landlords facing unprecedented financial challenges’

Mr Douglas, who is the head of policy and campaigns at Propertymark, said: “The decision to phase out Mortgage Interest Relief and other unfavourable taxation policies is resulting in landlords facing unprecedented financial challenges.

“If a decision not to implement a pro-growth taxation agenda for the private rented sector is not brought forward, it will be the most vulnerable tenants who are negatively impacted, many of whom are in receipt of benefits.

“The UK Government must increase housing options for the most vulnerable by setting Local Housing Allowance at the thirtieth percentile, if not the fiftieth, and to increase this annually to keep pace with market rents.”

He added: “A change in rhetoric is also needed with policymakers viewing private landlords and letting agents as part of the solution to resolve the housing crisis.”

He said he was pleased to see the DWP is now investigating how it can engage with membership bodies such as Propertymark.

Below, Timothy Douglas, Propertymark’s head of policy and campaigns, was invited to give evidence to the Department for Work and Pensions Commons Committee hearing on the current benefit levels in the UK.

Share This Article


Judith Wordsworth

9:47 AM, 3rd July 2023, About 8 months ago

Slightly contentious, but (1) why should tax payers pay to keep landlords afloat who have either paid too much to enter the PRS, got too high a loan to value, not done detailed planning forecastes, or not got enough money behind themselves to ride out financial storms?
If in any business that the returns don't stack up, you get out.
(2) LA's remove another incentive for those claiming housing benefit, UC etc not to get even part-time work at a time when there are more vacancies than there are people who want to work.

Dave S

10:19 AM, 3rd July 2023, About 8 months ago

@Judith Wordsworth (1) the figures stacked up even at today’s interest rate when we entered BTL many years ago however George Osborne moved the goalposts when he brought in c24 interest relief restrictions how could we have predicted that this would happen. Any business would suffer if the government suddenly restricted its ability to offset its highest cost against profit. Compare it to a haulage company who is suddenly told that it can’t offset its fuel costs against its profit it would very soon go under (2) I do agree with you

Richard Beltrán

5:42 AM, 4th July 2023, About 8 months ago

The worst idea ever!
1. We have seen this mistake before! This was part of Dr Julie Rudd's paper which was based on a sample of 100 in Newcastle
2. LHA tracking average rents pushes up average rents.
3. In London the LHA peaked at 375 per week for a 1 bed and 1,000 per week for a 4 bed home.
5. Only the top 2% of this country can earn enough to pay this sort of rent!
6. Landlords whose properties were below the average in a given postcode started to insist on tenants in receipt of
LHA, pushing up rents and pricing out private tenants who are actually working!
7.To afford £1,000 per week, (52k per year) you need to earn over 150k per year. How many readers actually earn this?
8. You could never afford to go [back] to work as you would loose your benefits!
9 I gave evidence to the Department of Local Communities and Government as to why the LHA which tracks rents does not work! They seemed to have forgotten...
10. I bet Timothy does not live in a City Centre!

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership


Don't have an account? Sign Up

Landlord Tax Planning Book Now