publication date: Jan 6, 2011
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author/source: Kate Faulkner, Property Expert and Author of Which? Property Books
"Government's Incentive For Landlords Must Be Met With Caution" Says Landlord Action
Local Housing Allowance
Paul Shamplina, from Landlord Action believes the approach that the Government are now taking to offer private sector landlords the option to choose to receive Local Housing Allowance directly if they reduce their rents, must be met with caution, especially as it is only a temporary agreement and not a permanent return to direct payments.
Paul, Founder of Landlord Action, comments "On the one hand, as landlords and property professionals, we welcome any move that offers direct payments with regards to housing benefit tenants. Landlord Action has been campaigning on this front for some time now.
However, we must wait and see how landlords will respond. Security of direct payments is coming at the price of lower rent due to the government LHA caps being introduced in April 2011. This makes sense since landlords will be taking less risk under this scenario. However, many landlords will find housing benefit tenants unappealing when they can achieve higher rents by letting to, for example, 'professional tenants'.
We may find a situation where tenants on benefits will find it even harder to find suitable accommodation which, in the long term, will not help combat homelessness and cutting down waiting lists for housing.
Furthermore, if the Government can offer direct payments to one group of landlords, there is no reason why they cannot offer it to all landlords that take on tenants that are claiming Local Housing Allowance."
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