Editor
18-12-2008, 10:13 AM
This is an extract from this month's LandlordZONE Newsletter:
http://www.landlordzone.co.uk/BlogNews/LandlordLOGDec08.pdf
Housing Benefit is paid direct to local authorities and now housing associations - why should private landlords be the sole guinea pigs in this social experiment by the government to help HB tenants become "financially responsible"? We at LandlordZONE are detecting a worrying trend - more and more landlords we talk to are indicating that they intend to leave the sector.
Article:
CML –Press Release—1 Dec 08—Local Housing Allowance— Reports that the government does not intend to move towards paying housing benefit directly to social housing tenants will be welcomed by lenders.
According to a recent report in the Financial Times, the minister responsible for housing benefit, Kitty Ussher, gave a firm re-assurance that housing associations (HAs) and other registered social landlords would continue to have a guaranteed stream of income in the form of benefit paid directly to them.
Following a meeting with the minister earlier this autumn, we wrote to her expressing “very serious concern” about any measures that could disrupt the income stream and therefore jeopardise the contribution lenders make towards funding social housing.
Housing benefit typically provides 60% to 70% of the income of HAs and most of this is received directly by landlords. This guarantees a strong and reliable cash flow, and is cost-effective for landlords. That income is ultimately a source from which HAs repay the funds they have borrowed to build and improve affordable housing.
However, the possibility of paying housing benefit not to landlords but to tenants – who would then use it pay rent to their landlord – emerged as part of a package of measures intended to improve financial capability among tenants and their overall ability to manage money.
The reality is, however, that any decision to pay housing benefit directly to tenants would expose the funding of the social housing sector to greater risk. That would have serious implications for HAs, lenders and other investors.
LandlordZONE comment—In effect here the government is admitting that payments paid directly to tenants could jeopardise the funding arrangements for social landlords—so what about jeopardising payments to private landlords? Why should they be any different?
Speaking recently at the National Landlords’ Association (NLA) conference in Birmingham Minister Iain Wright MP reaffirmed the governments’ support for the Private Rented Sector (PRS) but stated that the Local Housing Allowance (LHA) principle of paying rent to tenants and not landlords was fundamentally correct.
Are we losing touch with reality or is this government committed to this form of doublespeak and hypocrisy when it comes to private landlords? HB Landlords should write to their MPs.
Read the full Newsletter here:
http://www.landlordzone.co.uk/BlogNews/LandlordLOGDec08.pdf
http://www.landlordzone.co.uk/BlogNews/LandlordLOGDec08.pdf
Housing Benefit is paid direct to local authorities and now housing associations - why should private landlords be the sole guinea pigs in this social experiment by the government to help HB tenants become "financially responsible"? We at LandlordZONE are detecting a worrying trend - more and more landlords we talk to are indicating that they intend to leave the sector.
Article:
CML –Press Release—1 Dec 08—Local Housing Allowance— Reports that the government does not intend to move towards paying housing benefit directly to social housing tenants will be welcomed by lenders.
According to a recent report in the Financial Times, the minister responsible for housing benefit, Kitty Ussher, gave a firm re-assurance that housing associations (HAs) and other registered social landlords would continue to have a guaranteed stream of income in the form of benefit paid directly to them.
Following a meeting with the minister earlier this autumn, we wrote to her expressing “very serious concern” about any measures that could disrupt the income stream and therefore jeopardise the contribution lenders make towards funding social housing.
Housing benefit typically provides 60% to 70% of the income of HAs and most of this is received directly by landlords. This guarantees a strong and reliable cash flow, and is cost-effective for landlords. That income is ultimately a source from which HAs repay the funds they have borrowed to build and improve affordable housing.
However, the possibility of paying housing benefit not to landlords but to tenants – who would then use it pay rent to their landlord – emerged as part of a package of measures intended to improve financial capability among tenants and their overall ability to manage money.
The reality is, however, that any decision to pay housing benefit directly to tenants would expose the funding of the social housing sector to greater risk. That would have serious implications for HAs, lenders and other investors.
LandlordZONE comment—In effect here the government is admitting that payments paid directly to tenants could jeopardise the funding arrangements for social landlords—so what about jeopardising payments to private landlords? Why should they be any different?
Speaking recently at the National Landlords’ Association (NLA) conference in Birmingham Minister Iain Wright MP reaffirmed the governments’ support for the Private Rented Sector (PRS) but stated that the Local Housing Allowance (LHA) principle of paying rent to tenants and not landlords was fundamentally correct.
Are we losing touch with reality or is this government committed to this form of doublespeak and hypocrisy when it comes to private landlords? HB Landlords should write to their MPs.
Read the full Newsletter here:
http://www.landlordzone.co.uk/BlogNews/LandlordLOGDec08.pdf