As part of the RLA’s work with the London Assembly, the Association conducted a survey to gather opinions of landlords in London whose tenants are experiencing the effects of welfare changes. These responses informed the RLA’s evidence to the Assembly on welfare reform and housing as part of the Assembly’s wider London Housing Strategy.
The findings are encouraging, with 59.4 per cent of London members responding that they have not stopped renting to housing benefit claimants under the age of 35 due to the introduction of the single room rate for those aged between 25 and 35. Despite recent stories in the press that landlords are at risk of suffering financially if renting to tenants on housing benefit, 63.4 per cent of members responded that their tenant(s) had not fallen into arrears because they were struggling to make their rent payments due to their benefits being restricted/capped.
Nonetheless, the RLA found that concern amongst London landlords is growing, with 74.2 per cent answering that they are more reluctant to let properties to tenants who are of working age and on benefits because of the recent benefit cap. However, this concern has already been raised by the RLA in recent evidence submitted to the London Assembly on housing and welfare reform; and, prior to Christmas, when the RLA gave oral evidence to the DWP select committee on Universal Credit and housing costs.
As the RLA’s Universal Credit and LHA adviser, Bill Irvine, pointed out in his article last week – encouraging landlords to back those on housing benefit – there is no need to follow the lead of one particular landlord who has served section 21 notices on tenants reliant on local housing allowance (LHA); because there is still a high demand, margins are often good, and the ‘threat’ posed by Universal Credit is being overstated and sensationalised, mainly through lack of knowledge of the new scheme.
It is also important to remember that London is a very different market from the rest of the country. Statistics from the Department for Work and Pensions, based on the audited returns of councils paying out housing benefit/LHA to 1.5 million recipients for the whole of the UK, confirm that LHA tenant numbers continue to rise, despite the cuts and restrictions. This is partly due to the bedroom tax and a shortage of 1/2 bedroom properties available in social housing. It is interesting to note that LHA expenditure has also risen steadily to around £8 billion since 2008.
These figures show that the private rented sector continues to provide a vital housing supply whilst pressure on social housing waiting lists ramps up. Clearly the sector would not be growing if landlords were bailing out of the LHA market nationally. Again we would urge landlords to find out more about Universal Credit before opting out of this increasingly important market.
Renowned welfare benefit expert, and RLA consultant, Bill Irvine runs a series of training workshops on ‘Universal Credit and the Benefits Cap’ on behalf of the RLA. These workshops focus on what’s already happened within Universal Credit and what you can do to mitigate the effects, now and in the future. Being aware of this information and potential mitigation strategies should enable you to assess your current situation and plan for the future:
Finally, we would again encourage members to get in touch if you do have any concerns, and to take the time to fully familiarise yourself with facts, in this period of change and uncertainty, before making any hasty decisions.
Please contact us if you would like more information.