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

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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.


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Comments

Ben Reeve-Lewis

6:04 AM, 2nd April 2012
About 9 years ago

Speaking from a council perspective we totaly agree, its the worst, most damaging bit of legislation to be brought in for sometime.Most tenants hate it too, they would rather have the choice like they used to. When Universal Credit comes in, the same payment method is going to be extended to social housing tenants too. Social landlords carry a high degree of benefit tenants but dont have the choice that PRS landlords do in not renting to them.

Government have steadfastedly ignored all warning from every part of the rental sector so the only way forward I can see is promoting and encouraging Credit Union accounts.

To correct a point on the fraud idea of tenants not passing over LHA. It isnt I'm afraid. The council's housing benefit team merely assess a tenants right to benefit and arrange the payments. If the tenant doesnt pay the rent then that is a contractual breach between landlord and tenant. There are housing benefit fraud teams but their remit is dealing with fraudulent claims made by landlords and tenants, not what happens to the money once it has been paid out.

As many of you know rent arrears possession claims are always hotly contested by both sides and ultimately its the judge who decides. Council HB departments couldnt operate if they had to make those determinations as well. They would in effect be asked to perform the investigative and administrative function of a county court before they could determine if the tenant had acted fraudulently.

15:10 PM, 4th April 2012
About 9 years ago

Did you know that if a DSS spends their housing benefit on other things other than rent so we landlords are yet again out of pocket... that it is no Fraud! How does that work then?? WE as landlords have enough trouble getting decent tenants and our top up rent paid and the councils ALWAYS believe the tenants even if we show them signed documents of proof when leaving properties, etc. WHY?? Do the councils have no concept? The tenants lose nothing.. we as landlords lose on every count.....

15:13 PM, 4th April 2012
About 9 years ago

Why cant we as DSS landlords recover the money via their benefits as does the council and housing associations?
I have lost over £15k in tenants not paying rent, then it takes months to get rid of them everything is at our cost even if legally they have signed documents saying they are liable. Why do we even get them to sign tenancy agreements when the law ignores them???

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