14:57 PM, 21st September 2011, About 10 years ago 7
Major housing organisations in the private and social rental sectors have joined forces to fight the government proposals to pay housing benefits direct to tenants.
The move affects the way millions of tenants are likely to pay their rents – especially the 20 per cent of tenants who have never had to budget for housing costs before.
The concern is tenants will spend the money on other living costs and lifestyle expenses rather than pay rent, leading to a massive amount of rent arrears.
The proposal is included in the Welfare Reform Bill, which has passed through a second reading in the House of Lords.
Lord Freud, the minister responsible for seeing the bill through Parliament, said: “Universal credit payments must include payments for housing costs. This means benefit claimants have to manage their own finances – their full finances – so when they do find work it’s easier to leave the safety of the welfare system. I am absolutely committed to making a single universal credit payment, wherever possible.”
He did recognise landlords were worried about how the changes might affect their cash flow.
“I know that this is a significant change for the social housing sector and I am fully conscious that housing benefit income steams are a vital component of housing finance, particularly in terms of funding of new housing,” he said.
Research suggest tenants would prefer housing benefits to be paid directly to landlords.
A survey of 1,000 tenants by the National Housing Federation (NHF), found 93 per cent favoured rent going directly to their landlord.
“We would like the government to guarantee that tenants should have a choice over whether or not their housing benefit should be paid directly to their landlord, and to accept an amendment to the Welfare Reform Bill in the House of Lords that will ensure this can happen,” said a statement from the Council of Mortgage Lenders, one of the organisations lobbying for the amendment.
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