97% Of Landlords Protest To Latest LHA Payments

UK private sector landlords have voiced the loudest protest yet over the government’s indirect payment of local housing allowance via tenants…

In a combination of survey and interviews, initiated by the Residential Landlords Association, an almost unanimous 97 per cent is asking the government to think again.

They are wanting tenants who claim LHA - local housing allowance (formerly “housing benefit”) - to have the choice of opting for direct payment to their landlords.

The Residential Landlords Association - whose members own over 100,000 private rented properties throughout the UK – has campaigned against this change since the government first began to trial it in 2003.

Experience shows many of the tenants are keeping the allowance for themselves, to cover other living expenses.

“Nearly half of all landlords letting to LHA claimants are not prepared to carry on doing so,” says RLA chairman, Alan Ward. “They just don’t have the appetite for it any longer because they have been let down so often by the allowance payment system.”

It was because of mounting discontent among landlords that the RLA organised an online poll. Nearly 200 landlords took part and the results were analysed by market research consultancy the BDRC Group who added 551 interviews with a nationally representative sample of UK landlords.

The respondents – 90 per cent of whom are currently letting to local housing allowance recipients – want changes in the regulations to allow landlords to receive benefit payments direct.

A total of 97 per cent are asking for change. Of the 81 per cent who have requested direct payment in the past, 70 per cent had been owed more than eight weeks rent arrears.

BDRC’s interviews revealed complaints such as:

‘My last tenants never handed over a penny in rent. They finally left owing me over £2,000. I will never deal with such tenants, housing benefit officials or rent assessment officers again.’

‘It is simply so hard to get money from a tenant who is struggling financially.’

‘I would only accept a tenant from LHA if the rent was paid direct to myself.’

Landlords prefer direct payment because it speeds up the rent collection process from claimant tenants who have poor payment histories, or debt problems, and are frequently more than two months behind with their rent.

They would like the government to

• revise its policy of paying direct to claimants
• make payments in advance rather than arrears
• or at least automatically revert to direct payment after tenants have fallen into one month’s arrears

Many landlords are planning to withdraw their properties from this market - because it is too risky and they can’t guarantee that rent will ever be received.

“The LHA sector has become a problem to landlords and that is bad for tenants too,” says Alan Ward.

“Landlords lose tenants, tenants lose homes, and the government loses a very useful stock of low cost housing … all because they want to put allowance claimants on trust to manage their own financial affairs.

“But these are often vulnerable people who usually need all the help they can get to manage the pound in their pocket. What they don’t need is the added responsibility, or temptation, to spend it on something else.”

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