Housing benefit should continue to be paid direct to tenants, a group of MPs has said. They were immediately accused of simply not listening.
The Work and Pensions select committee has rejected calls for Local Housing Allowance to be paid to landlords despite vociferous arguments from agents and landlords.
Landlord associations and letting agents say that paying the allowance to tenants means that rent is often not passed on, as tenants prefer to spend it on other things.
Many letting agents say they will no longer deal with social housing tenants, even though they recognise the high level of demand and the steadily increasing reliance that local authorities have on the private rented sector.
The Residential Landlords Association has warned that because of high levels of arrears, many of its members will no longer allow housing benefit tenants in their properties.
The National Landlords Association specifically claims that rent arrears among LHA tenancies have stacked up to £220m since the new system was introduced. It surveyed 1,000 landlords with tenants receiving LHA.
But the MPs say that paying LHA direct to tenants promotes them to take responsibility for their finances.
Last year, the Government proposed giving tenants a choice in whether they received payments direct. It also suggested landlords could receive the allowance if the properties met certain standards of energy efficiency and decency.
The select committee has rejected both ideas, whilst admitting that the issue of direct payments is the “most controversial aspect of the LHA” system.
David Salusbury, chairman of the National Landlords Association, said: “The reality is that LHA is not working as well as the Government would like to think. The NLA’s own survey found that on average, landlords were owed £4,400.
“This is public money that neither the taxpayer nor landlords can afford to lose.”
%20-%20IMAGE%20Client%20Accounting%20%E2%80%93%20what%20are%20your%20options.jpg)
Comments
If they pay you direct then it turns out the claim was not correct you have to pay it back is what we have been told.
Letting agents should know this already but see:
Doncaster v Coventry City Council, First Tier Tribunal 032/09/00932, 5 October 2009
You apply for direct payments as soon as 4 weeks arrears is known about
Complete madness, we as a company do not accept benefit, but even we were caught by a couple of Lithuanians who passed referencing then promptly resigned from their jobs after they took possession of the property, unknown to us, they then signed on for full benefits via DSS, the first we knew about it was when they stopped paying the rent, and after further investigation it materialised that they went on holiday with the money that was meant to be paid to the landlord I give up, the system is so insane it could only happen in the UK, no wonder we are the laughing stock of Europe
LHA only with a guarantor now. At least councils have to acknowledge the 'rent in advance' principle now so we can demand direct payment after 2 missed payments not three, when they were clinging to their rent in arrears argument.
Every single one of our low paid/unemployed tenants would like LHA paid direct to us and most of them are excellent payers anyway. However it only takes one to cost you a fortune and if you serve notice the council tell them to stay put until a court order is given. Of course it's a different rule for housing associations!
once again typical of MPs who are out of touch with reality. I deal with many of these clients, but we are now reconsidering our strategy because of the problems and abuse we incur on a daily basis trying to collect the rent. This will lead to more pressure on social housing as the private rented sector will shun these types of tenents and they will be left to rent the bottom of the market where landlords and tenents may well suit eachother!
Hopefully a change on govt may allow some common sense to prevail.