With the Pre-Budget Report fast approaching, the NLA wants less talk and more action on LHA reform. The latest research carried out by the NLA shows that total rent arrears across the UK relating to LHA could be as high as £220 million. With an increasing number of landlords being put under financial pressure because tenants are failing to pass on rent payments, there is no time to lose.
Local Housing Allowance (LHA) was introduced for new tenancies in April 2008 when it replaced the old housing benefit system. Under the new rules, instead of rent being paid directly to private landlords to cover housing costs, it now goes straight to the tenants who are responsible for passing on the rent money to their landlord. In practice, many tenants are failing to make these payments and this is causing major problems. In the most serious cases, landlords are refusing to let to tenants who are in receipt of Housing Benefit because of rental arrears.
David Salusbury, NLA Chairman, commenting about the failed LHA, said: “The Government must bring forward their planned review of LHA as soon as possible. If ministers are serious about the importance of the contribution the private-rented sector makes to the housing mix, then tenants’ right to choose to have their housing benefit paid direct to their landlords must be reinstated immediately.
“The reality is that both tenants and landlords are losing out under the current rules. The NLA is hearing about more and more landlords who are refusing to let to LHA tenants. We need more affordable housing in the UK, not less – action is needed and it is needed now.”