Almost 90% Of Landlords Are Owed LHA Rent

UK landlords have little confidence in the current Housing Benefit system and the majority would try to avoid accepting tenants in receipt of benefits due to the extra hassle and headaches that dealing with local authorities and local government departments cause.

Landlords claim that tenants who do not receive any form of welfare support are far more reliable when it comes to paying the rent on time and generally looking after the property.

The findings of a survey of over 1,000 UK landlords by flat and house share website Spareroom discovered that:

• 86% of Buy-To-Let landlords surveyed were against the welfare reform of the UK benefit system which since 2008 has automatically paid Local Housing Allowance (LHA) directly to the tenant, except under exceptional circumstances.
• 87% of UK landlords who accept tenants in receipt of Housing Benefit have had problems with the rent not being paid on time.
• 59% of landlords questioned state No DSS when advertising property to let

UK landlords were also asked why they would refuse DSS tenants,

• 11% of landlords have had benefit tenants who have stopped paying the rent.
• 30% believe working tenants are more reliable
• 47% did not want payment problems
(including late payments, no payment at all, issues arising from the suspension of benefit payments and/or damage to the property).
• 34% of landlords currently have LHA tenants in one or more properties
• 45% have previously taken in LHA tenants.
• 58% had previously experienced multiple problems with benefit tenants.
• 74% would refuse LHA tenants even if the tenant had a working, homeowner as a guarantor.

Director of Spareroom, Matt Hutchinson, said: “It’s clear from this survey that a shake-up of the current system of paying housing benefit to the tenant is desperately needed, and reverting back to the old structure, where landlords could receive rental payments directly from the council would be a step in the right direction.”

Legal 4 Landlords spokesman Sim Sekhon agreed; “The current LHA benefit system requires an overhaul as it causes many financial problems for landlords. Unless the tenants are in arrears and the local authority has agreed to make direct payments, the landlord has no guarantee of receiving the full rental payment from the tenant every month, unless they have Rent Guarantee Insurance.