Please Note: This Article is 11 years old. This increases the likelihood that some or all of it's content is now outdated.

Reports that the government does not intend to move towards paying housing benefit directly to social housing tenants will be welcomed by lenders.

Council of Mortgage Lenders Press Release – 1 Dec 08

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.

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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. Full Article

Please Note: This Article is 11 years old. This increases the likelihood that some or all of it's content is now outdated.

3 COMMENTS

  1. Typical double talk again. Whilst the big providers get their guaranteed income stream the smaller private lenders have to put up with the situation where the rent IS paid direct to the tenant to be passed on to the Landlord, and frequently isn\’t. Only after losing out on two months of income can the Landlord then apply to have it paid direct. Then has to chase the LHA for months usually. Is it any wonder that private LLs don\’t want to know about HB applicants?

  2. I completely agree, It seems the corparates can get paid directly to them, but Joe Public Landlord can\’t !!! Clear double standards ! I feel that unless LHA is paid directly to LL more and more will pull away from renting to these type of tenants, end result will be LA will have a greater homelessness problem. Things need to change now as with the currently climate more and more famailies are approaching the Housing Needs departments i.e repossesions both from LL and banks/lenders.

  3. Since the introduction of the HB paid direct to the tenants in April 08, I had 6 tenants since then ALL OF WHOM HAVE NOT PASSED ON THE MONEY ONTO ME WHATSOEVER!!!!!!!!!!!!!!!!!!! I am very concerned about this and thinking that I will not accept HB people again. There are many more agencies nearby who do NOT accept housing benefit people. Therefore, there would be more and more homeless people!!!! after 8 weeks!! well too late for me! the funny thing is that the council told me that it was my problem to get the first 8 weeks the tenant spend already without paying a penny for the rent!!! my money, my mortgage payments, my hard work gone down the drain!!!

    not happy at all!!!!

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