Housing benefit cuts deter landlords from letting

Wee_Willy_Harris

Graham_Devon wrote: »

LHA tenants are free to find any property they wish to rent.

They will then get a payment based on their circumstances. If that payment meets the rent, all good. If the payment doesn't meet the rent, then the tenant has to pay more. If the payment exceeds the rent, the LHA recipient gets to keep some of it.

There is no LHA rent "agency" as it were.

Sadly, this is being phased out, so there will no longer be an incentive for the LHA tenant to shop around for rent below the LHA rate.

LydiaJ

LLs may not be able simply to choose to let to fully solvent non-LHA tenants. There was a thread on here a day or two ago about a discussion on Vanessa Feltz's radio show about this. One of the people who phoned in was a LL saying that for many London properties there aren't any private tenants who can afford the rents that LHA tenants can pay. He said when he advertised a property for rent, he typically got one or two private tenants asking about it, and twenty-odd LHA ones.

(I liked him. He seemed a fair minded bloke and said he thought the situation had got ridiculous and the cap made sense because it wasn't fair for LHA tenants to have rent paid for them at a higher level than private tenants could afford. Which is remarkable, considering that I imagine he'll have to lower his rents to keep his properties occupied.)

Graham_Devon

Wee_Willy_Harris wrote: »

Sadly, this is being phased out, so there will no longer be an incentive for the LHA tenant to shop around for rent below the LHA rate.

I wouldn't say it's a sad thing to happen.

Not sure anyone should be pocketing taxpayers money intended for rent, where it pays more than the rent in all honesty. Be that landlord or tenant.

Wee_Willy_Harris

Graham_Devon wrote: »

I wouldn't say it's a sad thing to happen.

Not sure anyone should be pocketing taxpayers money intended for rent, where it pays more than the rent in all honesty. Be that landlord or tenant.

It encouraged a certain element of competition in market that has, traditionaly, been a bit "take it or leave it". It was also capped at a very modest level (£15pw). If used as intended, it had a downward pressure on rents, which favoured everyone bar the LL. At the end of the day, it matters little if the taxpayer is throwing £15 at a tenant, or £15 at a landlord, they are still throwing £15. Frankly, it would be better for the local economy in the tenants hands.

Brallaqueen

Graham_Devon wrote: »

LHA tenants are free to find any property they wish to rent.

...

There is no LHA rent "agency" as it were.

I agree, however LL and agencies will still cherry-pick tenants, particularly now FTBs are finding it difficult to get mortgages. They'll go for the most attractive option, and LHA caps will make LHA an unattractive option IF they can find similar money elsewhere. Or even less money coupled with less risk

Of course, area is key. You will find it difficult to rent a council house in a deprived area to an up and coming young professional couple. However in my town this market is currently being cornered by students (particularly International).

@ LydiaJ London is a law unto itself with regards to property and prices but I take your point.

Wee_Willy_Harris

Brallaqueen wrote: »

I agree, however LL and agencies will still cherry-pick tenants, particularly now FTBs are finding it difficult to get mortgages. They'll go for the most attractive option, and LHA caps will make LHA an unattractive option IF they can find similar money elsewhere. Or even less money coupled with less risk

Of course, area is key. You will find it difficult to rent a council house in a deprived area to an up and coming young professional couple. However in my town this market is currently being cornered by students (particularly International).

LHA tenants are already regarded as some sort of underclass by the majority of lanlords. But there are only so many non LHA tenants to go round. If you throw a limited (and decreasing) number of people (non LHA tenants) at a widening market, rents will go down.

Wee_Willy_Harris

Brallaqueen wrote: »

@ LydiaJ London is a law unto itself with regards to property and prices but I take your point.

And yet national policy is being decided to address a very localised problem in the South East.

Graham_Devon

Brallaqueen wrote: »

I agree, however LL and agencies will still cherry-pick tenants, particularly now FTBs are finding it difficult to get mortgages. They'll go for the most attractive option, and LHA caps will make LHA an unattractive option IF they can find similar money elsewhere. Or even less money coupled with less risk

Of course, area is key. You will find it difficult to rent a council house in a deprived area to an up and coming young professional couple. However in my town this market is currently being cornered by students (particularly International).

@ LydiaJ London is a law unto itself with regards to property and prices but I take your point.

I doubt they will find enough private renters knocking on their doors willing to pay above LHA rates. Especially for those dumping 35 properties onto the market.

But I guess we'll just have to wait and see. LHA caps, have though, allowed rents to rise each year, up to the new cap.

LHA has been very profitable for BTL landlords, hence why so many choose to allow it, and we had so many new landlords. There was an uproar from landlords when tenants got the money instead of the landlord directly, and a bluster went on then, with BTL landlords threatening to evict LHA tenants.

In the end, they knew it's better to have that money coming in from the tenant, than it is to lose the tenant alltogether.

Brallaqueen

Wee_Willy_Harris wrote: »

LHA tenants are already regarded as some sort of underclass by the majority of lanlords. But there are only so many non LHA tenants to go round. If you throw a limited (and decreasing) number of people (non LHA tenants) at a widening market, rents will go down.

You are right about the underclass bit, and TBH as a LL I wouldn't rent to a LHA tenant if I could help it, for reasons mentioned above.

Are there fewer non- LHA tenants out there? I can believe that in London due to the prices, but otherwise that does surprise me. I thought there would be more non LHAs for accommodation due to mortgage restrictions for FTBs, the boom in student accommodation, economic migrants and so on.

Wee_Willy_Harris

Brallaqueen wrote: »

You are right about the underclass bit, and TBH as a LL I wouldn't rent to a LHA tenant if I could help it, for reasons mentioned above.

Are there fewer non- LHA tenants out there? I can believe that in London due to the prices, but otherwise that does surprise me. I thought there would be more non LHAs for accommodation due to mortgage restrictions for FTBs, the boom in student accommodation, economic migrants and so on.

We are going through a period of substantial job-losses, reduced hours, reduced bonuses etc. All of these factors create LHA claimants out of non LHA claimants. Seems the wrong time to be limiting yourself with tenants.

Oh, and you can get the rent straight from the provider with LHA tenants if they are over 1 month in arrears, a choice you may struggle with if a non LHA claimant defaults.