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News release

NLA welcomes Tory reforms to Local Housing Allowance

22 Oct 2009

The National Landlords Association (NLA), the UK’s leading representative body for private-residential landlords, has claimed a lobbying victory following the Conservative Party announcement that they will reinstate direct rent payments to landlords where housing benefit tenants choose, if they become the next Government.

The NLA is now calling on the Government to bring forward the LHA review planned for 2010 and reinstate the tenants’ right to choose as soon as possible.

Local Housing Allowance (LHA) was introduced for new tenancies in April 2008 when it replaced the old housing benefit system. Under the new rules, instead of rent being paid directly to private landlords to cover housing costs, it now goes straight to the tenants who are responsible for passing on the rent money to their landlord. In practice, many tenants are failing to make these payments and this is causing major problems. In the most serious cases, landlords are refusing to let to tenants who are in receipt of Housing Benefit because of rental arrears.

The NLA has been campaigning against LHA from the outset because it believes landlords should not have to risk higher levels of rent arrears just because they let to housing benefit claimants. As always, it is the most vulnerable tenants who are affected by landlords withdrawing from this part of the rental sector.

The latest NLA research surveyed 1,000 landlords from around the UK who operate 13,000 LHA tenancies. The total rent arrears accumulated by these landlords since the introduction of LHA is £4.4 million, or an average of £4,400 per landlord.

According to the Government there are almost 675,000 LHA tenancies. Assuming the NLA research is representative of the total LHA sector, rent arrears across the UK could be in excess of £220 million.*

David Salusbury, Chairman, NLA, commenting on the Conservative Party announcement, said:

“LHA is now actively contributing to a shrinking of housing supply for benefit claimants. This latest proposal from the Tories is to be welcomed, but more importantly we want to see LHA properly assessed and tenants to be able to choose how their rent is paid. If a tenant wants their rent to go directly to their landlord – and this might be for a number of reasons – then this should be permitted within the rules. In the same way, if a tenant wants to manage their own rent payments, this is their choice.

“The NLA has worked extremely closely with the relevant Shadow teams on LHA reform. We are very pleased to have been part of their thinking on this issue.”

For more information to go www.landlords.org.uk/lha

* The Government has not published the total number of landlords within the LHA market. The NLA has, therefore, used the total number of tenancies within the LHA market and the number of tenancies within the research sample to extrapolate the total level of rent arrears across the entire market. The research assumes the sample data is representative of the LHA market as a whole, given the lack of official Government data.

NLA members are more experienced, portfolio landlords compared to the overall landlord population (English Housing Condition Survey, CLG, 2006). As these landlords are more likely to actively manage their rent arrears, it must be assumed that the figures are the tip of the iceberg and the real cost to the taxpayer of a malfunctioning LHA is much higher.

Example case studies

• Johnny is a landlord from Newcastle who no longer lets to those housing benefit claimants in receipt of LHA. He also has housing benefit claimants under the old system where he is paid directly. Johnny is available for comment through the NLA.
• Paul is a landlord from Leeds who is withdrawing from the LHA market. He has boarded up properties because of the arrears which have accrued owing to LHA and is no longer able to take the risk. Paul is available for comment through the NLA.
• Alastair runs a lettings business in West London and LHA has almost put him out of business because of the levels of rent arrears and necessary procedures to evict tenants. Alastair is available for comment through the NLA.

For case studies and immediate expert spokespeople, please contact:

Steven Hilton
Media Relations Manager, NLA
T: 020 7840 8906
M: 07508 031 084
E: steven.hilton@landlords.org.uk

or

Vincenzo Rampulla
Public Affairs Officer, NLA
T: 020 7840 8919
M: 07900 912 587
E: vincenzo.rampulla@landlords.org.uk

Notes to Editors

Representing landlords from all over the UK, the National Landlords Association (NLA) is the leading organisation for private-residential landlords. It campaigns for the legitimate interests of landlords by seeking to influence decision-makers at all levels of government and by making landlords’ collective voice heard in the media. The NLA helps landlords make a success of their lettings business by providing a wide range of information, advice and services. It seeks to raise standards in the private-rented sector while aiming to ensure that landlords are aware of their statutory rights and responsibilities.