Until a couple of years ago landlords with local authority tenants could have the rent paid direct to them rather than the tenant. In 2008 the system was changed with the introduction of the Local Housing Allowance (LHA). Now, the rent is paid to the tenant who is supposed to pass it on to the landlord. Inevitably some tenants spend it on other things and the rent is not paid. According to the National Landlords’ Association, LHA landlords are owed rent arrears averaging £4,400 each.
One company specialising in evicting tenants says it has seen a 20% increase in instructions from landlords to evict local authority tenants since the new system was introduced. It seems that in some cases the tenant was already in debt before the tenancy started; making it even more likely that there would be a rent default.
If landlords are deterred from entering this sector it will be harder to find homes for vulnerable people. A parliamentary committee recently reported that the Local Housing Allowance system is “falling short of its original intention and is in urgent need of review.”
Do you have any experience of the LHA scheme? If so please let us know.
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