New scheme may discourage landlords from renting to benefits claimants

News Category: Industry News

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The local housing allowance (LHA), a new government reform which is being introduced this month, may result in a reduction of the number of benefit claimants being provided accommodation by private landlords.

That is according to a recent report in the Observer, which noted that housing benefit will be replaced by the LHA scheme, in which tenants will pay landlords themselves by way of an allowance.

Citing the results of LHA trials conducted by the government in various pilot areas, the National Federation of Residential Landlords (NFRL) said that the scheme presented the risk of landlords not being paid their rent.

Mark Hayward, NFRL chief executive, commented: "The evidence from [the government's] own trial is that there could be a substantial reduction in the private rented sector, but they are still pressing ahead with it."

Concerns were also expressed by Tom Reynolds, a private landlord, who said: "In the past, [landlords] have been very accepting of housing benefit tenants because they would get regular payments, but now fewer may be prepared to accept them."

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