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?