Commenting, Vincenzo Rampulla, public affairs officer at the National Landlords Association, said: “The Government promised before the election that they would tackle the Local Housing Allowance (LHA) rent arrears waste which is running into the millions. It is an easy step to introduce choice for LHA tenants and enable them to have their LHA payment made directly to their landlord, if they wish to.
“The NLA is only asking Ministers to give LHA tenants the same choice available to most people when they set up a direct debit or standing order for their rent.”
LHA is one of the most important, and potentially damaging, issues currently facing the private-rented sector, according to eth NLA. Introduced in 2008 to replace Housing Benefit, LHA was intended to empower tenants and provide greater choice for benefit recipients. In reality it has led to a reduction in available housing stock and compelled many landlords to leave the market.
The NLA has been campaigning against LHA from the outset because it believes landlords should not have to risk higher levels of rent arrears just because they let to housing benefit claimants. As always, it is the most vulnerable tenants who are affected by landlords withdrawing from this part of the rental sector.
In 2009 NLA research found that 949 landlords had lost £4.229 million from LHA-based rental arrears. There are now 993,000 LHA recipients in the UK, a growth of 47% since the NLA published its research. The average weekly LHA award is £112.85, so a landlord can incur eight weeks of arrears, which would equate to an average of £902.8, before local authorities will take action.