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  • Buy-to-Let

    Changes to benefits system >>> homelessness



    Changes to the benefit system are behind the decade-long increase in homelessness from private rented housing, according to a new report published today.

    Research by the Policy Evaluation and Research Unit at Manchester Metropolitan University for the Residential Landlords Association has found that a key driver of homelessness from the private rented sector has been introduction in 2008 of the Local Housing Allowance (LHA), as a way of calculating Housing Benefit payments for low income households.

    There is evidence, both from the Manchester Met research and from other sources, that the gap between LHA rates and actual rents has increased in recent years and is expected to continue to increase in the future. A quarter of landlords surveyed in this research reported that this gap was more than £100 per month.

    The research team found that security of tenure is not a cause of homelessness from the private rented sector, as evidence from the English Housing Survey shows that 90 per cent of tenancies are ended by the tenant. Rather the research team found that the LHA rates has a ‘double whammy’ effect that is driving homelessness because tenants in receipt of Housing Benefit are more likely than other tenant groups to have their tenancy end; and these households are then finding it increasingly difficult to find suitable, affordable accommodation in the private rented sector.

    The report also highlights that in a large majority of cases where tenants are asked to leave their properties under Section 21 notices, there is a clear reason. Half of the notices are used where tenants have rent arrears, are committing anti-social behaviour or are damaging the property. Other common reasons include the landlord needing to take back possession of a property for sale or refurbishment.  The report authors argue that this “raises questions” about whether the use of Section 21 notices can properly be described as ‘no fault’ evictions. They call for further research to be undertaken on how and why landlords use Section 21 notices.

    The report calls both for a review of the design and operation of the LHA and for  councils to develop strategies to work with private landlords to encourage the supply of private rented homes at LHA rates.

    Commenting on the report, Dr Chris O’Leary, Deputy Director for the Policy Evaluation and Research Unit at Manchester Metropolitan University and a co-author of the report said:

    “Whilst current debate is focused on changes to the way that landlords reclaim possession of a property, this does not tackle reasons why they need to do so.

    “With the demand for rented housing remaining high, our report calls for co-operation between councils, landlords and the Government to support and sustain tenancies. This includes ensuring that benefits reflect the realities of today’s rents and work is undertaken to prevent rent arrears building in the first place.”

    David Smith, Policy Director for the RLA said:

    “This report puts paid to the idea that landlords spend their time looking for creative ways to evict their tenants. Most landlords ask their tenants to leave to protect their property. It would be a bizarre business model indeed to search for ways to get rid of your customers.

    “The private rented sector can play a key role not just in housing the homeless but preventing people becoming homeless in the first place. Action is needed on a number of fronts to boost the supply of homes to rent to meet demand and reform the benefits and the court system to give confidence to both tenants and landlords.”

    SEE ALSO  -          What causes homelessness in the UK?

    UP NEXT -              Homelessness - you ain't seen nothing yet!

    DON'T MISS -         Private landlords blamed for increasing homelessness

    NOW WATCH:

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    I’m on the east kent coast, the area has finally benefitted from a rise in popularity over the last couple of years, the attendant increase in prices, the effects of section 24, a low LHA rate and increasing requirements on HMO’s has seen a not inconsiderable number of properties, that had been split into hmo’s years ago, come onto the market ( their being older period properties that appeal to buyers looking to move to the area).

    In one road a landlord has put up for sale two properties that had 14 rooms between them, so possibly 14 people had to seek alternative accomodation.

    This has been matched by a visible rise in rough sleepers around the area, most commonly male with alcohol dependency issues, for whom the chances of finding accomodation are next to zero in the private sector.

    Another effect of this is that the local council seem to have a “ blind eye” policy in respect of some truly dreadful accommodation which continues operate seemingly outside any regulatory framework.

    It may well be this is done to both avoid more people ending up on the street and to relieve pressure on the council in terms of rehousing  obligations if a property is shut down due to enforcement action.

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    Another effect of this is that the local council seem to have a “ blind eye” policy in respect of some truly dreadful accommodation which continues operate seemingly outside any regulatory framework.

    It may well be this is done to both avoid more people ending up on the street and to relieve pressure on the council in terms of rehousing  obligations if a property is shut down due to enforcement action.

    Word for word what I said in the PRS debate - video at the footer of the opening post!!!

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    I did’nt watch the video, at 51 mins a bit too time consuming, apologies. My comments were in response to the text of the post and what i see locally, hopefully your having raised it will lead at least to some debate on the matter amongst those able to steer policy and legislation.

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    Plus via law change of Sept 2013 LAs can now bounce even the "accepted homeless" cases in to PRS - subject to 12 month AST within LHA rate.

    Latter acts to progressively filter out the poorer families from esp London/SE where LHA no longer covers self contained lets.

    There is evidence on Brickonomics website of an increase in whole families sharing one house with other households - as was commonplace up to and including 1970s.

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    " “With the demand for rented housing remaining high, our report calls for co-operation between councils, landlords and the Government to support and sustain tenancies. This includes ensuring that benefits reflect the realities of today’s rents and work is undertaken to prevent rent arrears building in the first place.” "

    Co-operation between councils, LL's, and the Govt will never happen because:

    1. Govt. doesn't listen, they dictate (as we can see from the whole LHA/UC problem)

    2. Councils don't listen. They're cash strapped because of #1 above, and "Wait for the bailiffs to arrive" is not a good long-term proposal for #3 below:

    3. LL's. They have councils against them at the local level, and Govt. against them at a higher level. No-win situation sounds about right for LL's providing housing to LHA tenants.

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    Unfortunately the reality is the sh1te flows from #1, to #2, to #3 with the occasional diversion of flow back to #2!

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    Our members who are letting agents have said they no longer take anyone on benefits. 2 main reasons too much admin work and when trying to make any enquiries when rent might be paid the agents come up against a number of difficulties. This of course is very worrying. 

    We very much hope these problems can be ironed out quickly.

    British Landlord Association

    thebla.co.uk

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    Commercial expediency is wholly absent from mindset of local govt - hence any attempt to interface is like trying to mate a bird with a mammal!

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