Benefits changes may affect landlords

Published: March 17, 2008

New rules concerning housing benefits may cause many landlords to turn their backs on unemployed tenants.

That is the opinion of the National Federation of Residential Landlords (NFRL), which said that the new local housing allowance (LHA) will not be welcomed by many buy-to-let property investors.

Under the new scheme, money will be paid to tenants and they will be left alone to find rented accommodation and will be responsible for keeping up with rental payments.

This signals a change from the current situation, where the money is paid directly to the landlord.

The NFRL has highlighted that many landlords will be unwilling to let their properties to a benefits claimant over fears that the rent may not be paid.

Tom Reynolds, from Hampsons letting agents, told the Observer: "At forums I have attended, landlords have complained about not being paid rent.

"In the past, they have been very accepting of housing benefit tenants because they would getregular payments, but now fewer may be prepared to accept them," he added.

The Association of Residential Letting Agents recently revealed that the average rent paid on a house in the UK increased by four per cent in the three months to February.