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Hi All
My property management agents were in the process of interviewing a pair of prospective tenants for one of my properties. The applicants were a homeless married couple who had been forced to relocate to the area due to losing their jobs and wanted to move to an area with better employment opportunities.

The application was going great until it came to checking the couple’s housing benefit entitlement….

According to the local authority (I wont name and shame them here for legal reasons) the married couple were only entitled to the shared room rate because they were married and under 35. The management company attempted to argue over such blatant discrimination by the local authority but the facts seemed to fall on deaf ears.

Single claimants under 35 would be entitled to receive the shared room rate in full as individuals, but because the applicants were married they only counted as a single applicant!

It has taken 4 months of hard work, stress and a great deal of legal wrangling to sort out, including requests for Discretionary Payments, consultations with LHA professionals and arguements with various Government departments.

Following tips and advice gleaned from “The Essential Landlords LHA Handbook” I have now been able to get the full 2 bed LHA rate paid directly to me and the local authority have been forced to make a grovelling apology to the tenants!

It just goes to show that when armed with the right information and legal standpoints there are always options open to landlords, and it pays to invest in the knowledge of experts!

I would like to publicly thank the LHA Expert for his brilliant LHA book and tons of helpful advice!

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Details of the Government’s new procedures for the payment of universal credit have been released – and they confirm that the landlord’s right to insist on direct rent payments if a tenant is in arrears will be scrapped.

Instead, payments will be made directly to tenants and it will be up to them to pay their rents or not. The proposals will mean the end of direct payment to landlords for rent as we have known it, and the new procedures will apply across the board to local authority tenants, housing association tenants and tenants in the private rented sector.

The RLA has serious concerns about the proposals:

1. No back stop provision under which a landlord can demand payment direct.
2. Lack of clarity/much greater individual discretion in operating these rules because “guidance” replaces regulations.
3. No means of redress for landlords if things go wrong/no rights of appeal.
4. No proposal that the guidance should reflect the landlords interests to make sure that rent is paid and that a roof is kept over the head of the claimant.
5. The whole concept of trying to improve tenant’s responsibility at the cost of much greater risk to landlords with strong likelihood of significantly higher arrears.
6. Much less likelihood of landlords being willing to take on benefit claimants. This could even translate into less likelihood of a willingness to take on claimants who are in work especially part time work because the same rules will apply to them.
7. No provision for first payment of benefit direct to the landlord.
8. We have argued with DWP that there should be a right for landlords to be paid direct payments once there are six weeks arrears and also that the whole system of vulnerability should be assessed according to the tenant’s interest of keeping a roof over their head and the landlord’s interest to receive the money, as well as the public interest of making sure that the benefit is used for its intended purpose.

Richard Jones, the RLA’s policy director, said, “We strongly believe that the Government’s whole approach is flawed and although the objective of helping tenants manage their financial affairs is in isolation a laudable one, the Government has wholly failed to appreciate the consequences of this. There will be a much higher level of arrears, an unwillingness of landlords to house benefit claimants (at a time when there is huge pressure on social housing), increased unwillingness by banks to lend for this kind of property (or increased interest rate to reflect the risk), much higher levels of evictions and much greater homelessness.”

The RLA has produced a briefing note for landlords, and this can be downloaded by clicking here.

What can I do?

Further details will follow about how you can assist the RLA in opposing these proposals.#

Join the Residential Landlords Association

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In an interview with the Mail on Sunday, Prime Minister David Cameron suggested cutting housing benefit for people under the age of 25 in an attempt to claw back Millions of pounds worth of Government money

Housing benefit is paid to adults on a low income, to help them pay their rent, either to the local council, a private landlord or to a hostel.

It is currently paid to around 380,000 under-25s and scrapping their entitlement would save the government around £2 Billion (GBP) a year.

The Prime Minister suggested that the current housing benefit system is sending out “strange signals” that people are “better off not working, or working less”. It encourages people not to work and have children, but we should help people to work and have children”.

The proposed reforms to the welfare system could be presented as an effort to reduce a feeling of antipathy towards people on benefits that may exist among the general public.

Mr Cameron said that current benefits system has “led to huge resentment amongst those who pay into the system, because they feel that what they are having to work hard for, others are getting without having to put in the effort.”

He also commented that cutting housing benefit for younger people would “stop the state dragging young people into dependency”.

Downing Street said that Mr Cameron wanted to encourage a debate about welfare.

The Prime Minister is also considering proposals to set benefits at a regional level, rather than a national level, in order to reflect wide regional variations in pay.

Political analysts have suggested that Mr Cameron’s comments are part of an effort to reconnect with Conservative backbenchers who believe the party’s values are being watered down under the coalition.

Housing charity Shelter has warned that cutting housing benefit for young people could lead to an increase in homelessness.

The charity’s chief executive Campbell Robb said: “To take away housing benefit from hundreds of thousands of young people – particularly in the current economic environment where young people in particular are finding it very difficult to find jobs – would have a devastating impact on many people’s lives. I think we would see many more people ending up homeless as a result of this kind of very significant change.”

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