Cameron’s housing benefit gaffe exposed by councils

by Property118.com News Team

16:40 PM, 20th March 2012
About 9 years ago

Cameron’s housing benefit gaffe exposed by councils

Make Text Bigger
Cameron’s housing benefit gaffe exposed by councils

Prime Minister David Cameron’s claim that buy to let landlords are dropping rents in response to the Government’s welfare reforms is untrue, according to information from councils.

Cameron told the House of Commons that the new welfare policy was forcing landlords to cut rents, but social housing magazine Inside Housing tested the claim by sending freedom of information requests to every council in England.

The brutal truth is just 36 councils confirmed any landlords were cutting rents in return for direct housing benefit payments – and 12 had a total of 65 landlords taking advantage of the offer.

Cameron had told MPs: “Rent levels have come down, so we have stopped ripping off the taxpayer.”

His claim seems to be based on a buy to let rental index from LSL Property Services, the UK’s largest letting agent, that showed an average decline in buy to let rents for December, says the Residential Landlords Association.

The LSL index does not track housing benefit payments to buy to let landlords.

The statement was in support of an offer in the new universal credit reforms that lets councils pay housing benefits direct to landlords rather than tenants – providing the landlord offers at least a 10% discount on the rent.

“In an attempt to get landlords to lower rents, councils have temporary powers to pay the LHA to landlords, rather than tenants, in exchange for lowered rents,” said the Residential Landlords Association.

“The survey suggests that most landlords are not remotely tempted – in keeping with warnings from landlord associations that most landlords would rather re-let their properties at the full market price to non-LHA tenants, and can do so in the current climate of high rental demand.”

The RLA has conducted a long-running campaign against paying housing benefits direct to tenants, claiming some tenants fail to pass on the payment, which leads to cash flow problems for landlords and arrears problems.



Comments

17:23 PM, 20th March 2012
About 9 years ago

Nonsense David, Rents are now based on a Percentile? and in Bradford at least its gradually growing. How is that even possible if rents are going down?

12:07 PM, 21st March 2012
About 9 years ago

I spoke to a landlord at work yesterday. He stated he didn't like his tenant (west London) but has still reduced the rent after a request of the Council.  I believe there are many landlords who are reducing like Cameron says.

We are in interesting times now with rents starting to fall, possibly caused by the surge in buy to let in the last 6 months increasing supply.

9:59 AM, 23rd March 2012
About 9 years ago

There are 2 posisble hidden agendas here - I would imagine only one is true unless they are to keep two parties happy.

1) Cameron wants to pretend that rents are dropping to stop the general public moaning about the rich landlords set - a set which probably includes his Eton chum(p)s. In a way this is a fair sound byte as it's just correcting peoples misconceptions.

2) The start/furthering of the Goverment/Offload to councils of total control over letting which began with HMO licensing and planning permission. They are now in the money equation so to speak(with their 10%) so have a big foot in the door. It's as if Councils conceptualise rented houses as their own hotels on a monolpoly board they can manage and take commision off. I don't know why they don't run a letting agency alongside and cream of that to - oh but they do in places don't they. I think somehow someone needs to ask the question at what point did councils become controllers of the houses on the street, not their servants and how in the bigger picture, outside the topic here, should this whole power flux be corrected.

John Bolland

10:13 AM, 23rd March 2012
About 9 years ago

Depends on supply and demand. I have rents up and rents down, latter were probably high in first place due to demand.
Housing market is very dependent on LOCATION......

11:35 AM, 31st March 2012
About 9 years ago

Cameron talks out of the bit he should be sitting on. He has no idea that with DSS tenants landlords are unable to get insurance. Why would a landlord put rent down in these circumstances?

Toplets is spot on with rent level reasons for change.

11:36 AM, 31st March 2012
About 9 years ago

If housing benefit is for the purpose of rent
there is no reason in the world why it should be paid to the tenant 
All such payments should be made directly to the landlord 
therefore the landlord has no cash flow problems and above all the payment goes to the source for what it was intended 
The current choice offered to housing benefit tenants is a load of non sense 

13:57 PM, 31st March 2012
About 9 years ago

IF RENT IS SENT DIRECT TO THE LANDLORD (ME) I PAY TAXES ON IT.  SENT TO THE TENANT WHO DOESNT PAY THE LANDLORD WELL THAT GOES STRAIGHT INTO THEIR BACK POCKET.

14:29 PM, 31st March 2012
About 9 years ago

Total Claptrap.  Worst bit of legislation ever brought in by any government tenants in control of when they pay there rent and often don't then the landlord has to evict them or have an ongoing problem with rent arrears. And then at the end of the lease the tenant leaves owning 2 months rent not to mention the damage to the property. I have have lost at least £25K to this scam.

I trying not to take anymore LHA tenants. 

The joke is they don't have to pay a penny back. so the bad tenant wins and can go and do the same again to the next landlord.Who protects my rights as a Landlord as they took this away when the option to pay the landlord direct was stopped.Lunatics have taken over the asylum.    

17:40 PM, 31st March 2012
About 9 years ago

Monies paid to a tenant to pay a LL for accommodation that a council is obliged to provide, in this case  via the medium of a PRS LL; that is then not paid to the LL, isn't that fraud!?
Surely theft of monies  by a tenant provided by the council for accommodation is a criminal offence.

Paul Fenton

12:42 PM, 1st April 2012
About 9 years ago

Rents have not gone up in my area so if inflation is taken into account Cameron is correct , allowances have actually gone down in the last 3 years espeially if inflation is considered

1 2

Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

Is this a DWP system failure or just an excuse?

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More