Large numbers of private landlords are refusing to let to tenants who receive housing benefit because they now receive their cash directly, according to a new survey.
The local housing allowance, introduced in April last year, is paid directly to private sector tenants, rather than to landlords.
Landlords say they are being put at risk of repossession because tenants are choosing to hang on to the benefits money, rather than pay their rents.
More than half - 52 per cent - of nearly 500 landlords responding to a survey by the National Landlords' Association said the new system had made them decide not to let, or made them less likely to let, to benefit claimants. And 43 per cent of landlords who had tried the system said they would now turn away LHA recipients, due to uncertainty about payments.
Alastair Kerr, who runs a lettings business in Chiswick, west London, said he had lost around £50,000 in rent since the new local housing allowance was introduced last April.
One tenant left for Jamaica, pocketing around £6,000 in allowance.
Another tenant abandoned a property after running up two months of arrears. Mr Kerr said all the people who had run up arrears had been model tenants for several years before the new system was introduced.
He called the new system 'an abdication of responsibility', which tempted vulnerable people into debt. 'How many landlords are going to pick up tenants like this in the future? Once bitten, twice shy,' he added.
'We've gone out to help the government and help local communities and we're being punished. How ridiculous is that? This is a significant problem and the trouble is, a lot of people will go bust.'
Alastair Kerr, who runs a lettings business in Chiswick, west London
NLA director Richard Price said: 'It is clear that the LHA is not improving access to housing and has actually reduced tenant choice. If landlords are opting out of this part of the market, where will these families go? The situation is becoming very serious.'
A Department for Work and Pensions spokesperson said: 'We have safeguards to protect the interests of landlords - if a customer cannot manage their rent
payments, the local authorities pay the landlord directly.'
Courtesy:- Inside Housing
