FAMILIES on housing benefit face homelessness as private landlords shun them following changes to the law.
Since the introduction of the Local Housing Allowance (LHA) in April growing numbers of landlords are losing out on rent; and the situation is worsening as the credit crunch takes hold.
Landlord Action director Paul Shamplina, who helps landlords recover their properties from bad tenants, believes LHA is a mistake and has called for an urgent review. “The government idea was to make private sector tenants more financially independent and learn to manage their own money, so the housing benefit is now paid directly to them. But the simple truth is, when times are bad paying the rent is not a priority for many tenants and there are many now who are just not passing it on to their landlord.”
Previously, tenants could elect to have the council pay their rent directly to the landlord but this is no longer an option unless the tenant falls behind with the rent or is identified through representation as being unlikely to pay it.
Shamplina has seen a huge increase in the number of landlords coming to him for help in the last two months. He explains: “The rules say that if tenants withhold their rent landlords can apply to the local authority to have it paid to them, but by then it can be months in arrears.”
Providing evidence isn’t always straightforward. Parmi Janagle from Sutton Coldfield near Birmingham is a property portfolio manager and approached Landlord Action for help after experiencing first hand problems with LHA.
He says: “This was not a well thought out idea. The government wanted to empower tenants but it has had a counter effect. To assist local authorities identify cases where direct payment should be made there has to be evidence, by for example showing there is a County Court Judgement against the tenant or that the tenant has addiction issues backed up by a doctor’s letter.”
Things like this all take time and meanwhile the rent arrears continue to build up.
“The reality of the situation is that many landlords who used to let to housing benefit tenants are thinking twice and now will not make their properties available to them,” says Mr Janagle.
“This is a problem of the government’s own making,” says Mr Shamplina. “And both tenants and landlords are suffering as a result. Things can only get worse now because of the credit crunch. There should be an urgent review of LHA.”
Landlord Action, founded in 1999, is the original and longest-serving fixed fee tenant eviction service in Great Britain. Landlords with problem tenants can find professional advice fast on the website www.landlordaction.co.uk or by calling 0845 8110011.
Landlord Action, founded in 1999, is the original and longest-serving fixed fee tenant eviction service in Great Britain. www.landlordaction.co.uk