Landlords forced out of housing benefit marketMake Text Bigger
As MPs debated the Welfare Reform Bill at report stage on Monday, 13 June, a survey by the National Landlords Association (NLA) had already revealed that more than half of private residential landlords are planning to reduce the number of properties they let to tenants on housing benefits.
Around 450,000 homes are let to tenants on housing benefit but more than half (58%) of the landlords questioned said they would have to cut the number of properties they let to tenants paid housing benefits, with 90% planning to do so in the next 18 months and one third stating they would do so immediately.
One of the main concerns highlighted was about the reduction of Local Housing Allowance (LHA) rates from the average market rent to the bottom 30%. This concern was shared by more than 80% of landlords with the same number also worried about future LHA increases being linked to the Consumer Price Index (CPI) rather than true market rents. CPI is running about 1% lower than the retail price index (RPI), which takes housing costs in to consideration.
With the large majority of landlords facing mortgage repayments and rising running costs, as many as 90% revealed that they simply cannot afford to reduce their rents to absorb the changes to LHA.
David Salusbury, Chairman of the National Landlords Association, commented:
“These findings by the National Landlords Association are concerning as they indicate that cuts to LHA benefits are forcing landlords out of this part of the rental market.
“The private rented sector is playing an increasingly important role in providing accommodation to housing benefit recipients in the UK. The Government is implementing cuts which, this survey tells us, is likely to lead to an increasing number of people struggling to pay their rent.
“The NLA believes there is a risk that the Government’s policies will result in fewer affordable rental properties available to vulnerable families across the UK, especially as the number of people claiming benefits continues to rise. Benefit payments must ensure that LHA tenants are not left at risk and that landlords providing this much-needed housing can cover their costs.”
The concerns over housing benefit changes come at the same time as the government proposes to scrap payments that let single adults rent their own self-contained flats.
Instead, they will receive a payment that covers a room in a shared house. This is measure is predicted to push 88,000 more tenants in to looking for accommodation in shared houses.
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