16:40 PM, 20th March 2012, About 10 years ago 13
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.
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