Benefit tenants could pay landlords direct (again)!
Why do most letting agents turn down potential tenants who are in receipt of Local Housing Allowance (LHA)?
Ultimately, the decision on whether to accept a tenant in receipt of LHA is down to the landlord, not the agent. One of the most common reasons that landlords do not accept tenants on LHA is that by default, the local authority will pay the allowance to the tenant, who is then expected to use this money to pay the rent. Landlords are no longer normally paid direct by the local authority (there are certain circumstances where the local authority will pay the landlord direct – these include situations where the tenant is at least 8 weeks in rental arrears).
From our own experience, the inability of most LHA tenants to have their rent paid direct to their landlords causes a problem. It’s a fact that some tenants do not cope well with handling their own rent and even though they would be willing to have the rent paid to the landlord direct, the local authority won’t allow it which means these tenants continually fall behind with payments. This means that the tenant could end up with a negative reference at the end of the tenancy, making it harder for LHA tenants to secure quality housing.
In its report “Supporting people into work: the next stage of Housing Benefit reform”, the Department for Work and Pensions (DWP) admits that the system is flawed:
“Some stakeholders have raised concerns about the operation of direct payment of Local Housing Allowance to customers and we know that, in some cases, safeguard procedures are not being operated well enough”
The National Landlord’s Asssociation (NLA) has welcomed this report, which commits to providing local authorities with better guidance on decision-making regarding the local housing allowance.
David Salusbury, Chairman, NLA, said: “This consultation is by no means perfect but the issues which affect LHA can no longer be ignored. The NLA’s response on behalf of landlords across the UK will focus on ensuring that tenants are truly empowered by having the option of being allowed to have rent payments made directly to their landlord if they wish.
“We will also be campaigning for proper safeguards which ensure that councils up and down the country are able to deal quickly and effectively where tenancies start to get into difficulties. This means a more creative engagement between town halls and their local private-rented sector.”
LHA was introduced for new tenancies in April 2008 when it replaced the old ‘housing benefit’ system
2 Responses to “Benefit tenants could pay landlords direct (again)!”
The most difficult thing is to find a blog with unique and fresh content but your blog is different. Bravo.
I was under the impression this new goverment were reverting to paying the landlords DIRECTLY again if and when they were elected, well they are in and we are still waiting. I personally have lost over £20,000.00 and I am still losing money as each month goes by, I am struggling to meet mortgage payments even though the interest rates are low, once they begin to rise I will sink!Do you think they will ever go back to paying the landlords directly,the current system is absolute madness, everybody thinks that except for the goverment, what a waste of taxpayers money, I am just about to evict my fifth LHA tenant who has been spending my money! They all have very nice HD flat screen TVs,Sky, and the best computers and latest cell phones, its not funny its a disgrace, the people that run this country are so far removed with the real world, one of my tenants told me he gets so much (taxpayers) money from the local council he doesnt know what to spend it on next!I will not be able to hold out much longer.