The latest research from flat and house share website, Spareroom, highlights some serious problems at the heart of the UK’s rental industry.
In 2008, the government changed its policy to one which pays new claimants housing benefit directly to the tenant rather than the landlord and also changed the way new tenants entitlements are calculated. In some cases, this reduced tenants LHA housing benefit payments, requiring them to make up the shortfall in rent. Both changes have clearly made an impact.
And from April 2011, the way in which LHA entitlements are calculated was changed once again, meaning that the shortfall tenants were expected to pay increased.
Since then, over half of all landlords have experienced problems collecting rent and this problem is more pronounced with social housing tenants, with 87% of landlords claiming rent is not being paid on time or in some cases, not at all. Given these facts, it is not unsurprising that 86% want to revert to the government paying them directly and that 56% won’t accept social housing tenants at all.
However, important facts are being overlooked. One is the impact of the housing benefit cuts on peoples’ ability to pay and the second is the fact that many of the social housing tenants well be in their 60s and older without the means of working and earning additional income to supplement their rents.
In recent months, we have all seen inflation levels, food prices, utility bills and VAT rise – making it harder for the elderly to make ends meet. The low interest rates have also diminished returns on any savings. The housing benefit cuts will have come as a serious financial blow to the over 60s living in social housing – what they don’t need now is for their landlords to give up on them.
2 Comments
i agree with your comments.i am happy renting my flat .but due to the lha rules i shall be looking for somewhere cheaper to live.perhaps the landlords should for tenants on housing benefit only increase the rent each year by the amount the lha rises by.not the rpi fig.that would then be fair to tenants.and hopefully to responsable landlords also.perhaps you can give this some thought.i will welcome your reply.
Dear Mr Fownes. To answer your suggestion that Landlords should ‘only increase the rent each year by the amount the lha rises by, not the rpi fig’; we do not necessarily know which of our tenants are in receipt of housing benefit and which are not.
Most landlords will want to be able to maintain the value of their rental income against inflation, but we recognise that many tenants, especially those who rely on housing benefit, are finding things difficult, and we will work with landlords and tenants to find an acceptable compromise on a case by case basis. We encourage tenants to contact us if they are concerned about being able to pay their rent.