The RLA has responded to Ed Miliband’s calls today for councils to be able to bulk negotiate rents on behalf of housing benefit claimants as a way of reducing the benefits bill by saying that there needs to be much more detail.
Alan Ward, Chairman of the Residential Landlords Association said:
“There are a number of questions over the idea of local authorities’ bulk negotiating rents on behalf of housing benefit claimants. Would the tenants be vetted to ensure they have a good history of payments? Would direct payments of housing benefits to landlords be offered? Who would be responsible for the management and maintenance of the property in light of the reduced income for landlords?
“Crucially, many mortgage providers require cover of 125 per cent. There is a very real danger that discounting rents could lead many landlords to breach their lenders terms.
“The devil of Mr Miliband’s speech will now very much be in the detail of what he is proposing.”
Mr Ward went on to say:
“The RLA wholeheartedly supports the idea of boosting the supply of private rented properties as the best way to reduce the housing benefit bill. The most effective way to achieve this however would be for the Labour Party to ensure that the taxation system properly regards renting a property as a business activity which would both encourage and support investment in new homes.”