One of the most consistent threads running through my Notable Property Persons posts is the need to get Local Housing Allowance (LHA) paid direct to landlords. Practically everyone mentions it.
Many tenants would infinitely prefer their benefit to be paid over to their landlords, as it would prevent them spending it by accident or having it swallowed up by their bank overdraft. Some tenants do not have (and perhaps do not want to have) a bank account at all.
At present LHA can only normally be paid direct where the tenant is ‘vulnerable’ or where there are rent arrears of eight weeks or more. Which many say is far too long a period bearing in mind that the landlord still has his mortgage and other payments to make.
One solution is to have the money paid into a Credit Union (many of whom run a special service offering ring fenced accounts for benefit payments), but not all areas have a credit union which offers this.
The Conservative Party announced last year that they would be reinstating direct payments to landlords, but so far as I am aware, there does not appear to be any immediate prospect of this. If they want to encourage landlords to take more LHA tenants, this would be a good way to do it.
Although back when there was direct payment, there was also the problem of clawback. This was where a landlord would be ordered to repay benefit where an overpayment had been made. Even though in many cases this had been made to a completely different landlord and the landlord being asked to pay would be left out of pocket. Having the benefit paid via tenants does at least remove the possibility of this happening.
But there is no doubt that most landlords would be prepared to take this risk, and have the money paid direct to them.
Does anyone have any information as to if and if so when, this is likely to happen?
Hi Tessa,
I had a meeting with officials at Downing Street, approximately a fortnight ago, and I understand that they are keen to see payments direct to landlords reinstated and this will be reviewed between now and the spring – lets keep fingers crossed!
Our experience is that many tenants would also prefer to have the LHA paid direct to landlords, but of course there are options out there that can protect landlords against these risks.
Thats excellent news and will be welcomed by both landlords and tenants.
Under the proposals put forward by Ian Duncan-Smith at the DWP for Universal Credit, it would appear that the payment of LHA direct to landlords, or even giving the choice to tenants is unlikely to happen.
This will replace six benefits, with Housing Benefits one of the six. So the claimant will be paid the money and ‘expected’ to pass on to the landlord for rent.
Details can be seen on the relevant government web-site.
This is clearly not good news for landlords, and is contrary to the manifesto promise made by the Conservatives.
Peter Davis
CEO – Eastern Landlords Association
01603 767101
as a small L/L with 13 properties,the new “pay tenant” rule has left me with 6 people now owing me over £1500. 3 have dissappeared with my money, 1 is awaiting eviction, and 2 are mothers with children. As a pentioner this is unsustainable and I have now put my first property up for sale. The new age limit will be a further disaster for my 6 one bed flats as I have always helped to house DSS claimants. I am giving up after 30 yrs.
The LHA often do not pay out to landlords. This is a myth. Then they will adivse the tenant to stay until the bayliff evict the tenant which could take upto anything upto a year have issued section 21 notice and waiting for the court. Say NO TO DSS and HOUSING ALLOWANCE TENANTS!
It should not take that long to get possession under section 21 if done properly. I generally find it takes about 2-3 or at the most 4 months. Unless something goes wrong and then it can take about six to seven months (assuming the problem is one which can be sorted).
I have never had a section 21 repossession take as long as a year.
You can read more about repossession here: http://www.landlordlaw.co.uk/repossession-services-landlord-law