As of April this year, the Local Housing Allowance (LHA) is being paid directly to tenants. Previously it was paid to landlords. Unfortunately this change is causing landlords to lose out on rent collection, especially with the worsening economic climate.
As a result more and more landlords are now reluctant to rent properties to tenants who receive housing benefits.
My good friend, Paul Shamplina, from Landlord Action feels that the change in the way the housing allowance is paid has been a mistake and he is therefore asking for an immediate review.
The housing benefit is being given directly to the tenants to enable them to be financially independent and become capable of handling their own funds. But the reality is that when times get tough (i.e. like the current economic climate) the tenant no longer feels that paying the rent is the top priority on the agenda.
As the economic climate has worsened there has been a sharp increase in the number of landlords seeking help due to unpaid rents. The rules state that a landlord can appeal to the local authorities to have the rent paid, but in reality this takes time. Whilst the outstanding rents are being chased the landlord’s pockets are empty as the arrears pile up.
In order to make a claim for missing rents the landlord needs to provide evidence which in many cases can be difficult to provide.
As was widely expected from the outset, this change in the way housing benefit was paid was going to lead to more and more tenants defaulting on their rental commitments.
Sadly this has been the case.
Did you know?
Our property management software allows you to track all your tenant income and produces up-to-the-minute reports showing what has been paid, when it was paid and any arrears. You can use this information to keep on top of your rents.
