Debt advisers are worried that plans by the Government to introduce a local housing allowance will deter private landlords from renting to those on benefits. At present, housing benefits can be paid direct to the landlord through local authorities, but the government is proposing that all payments go directly to the tenant, and have already piloted the scheme in 18 local authorities.
They plan to implement the scheme throughout the country by March 2008. It is thought that if tenants are given the responsibility to pay their rent, they may end up using the money to pay off other debts, leaving the landlord out of pocket and deterring other landlords from renting to those in a similar position.
Research by the National Landlords Association shows that only a third feel positive about renting to those on housing benefits, while 20% like the idea that they can rely on rent payments from those on housing benefit.
Our view
This is perhaps a good move in that it will stimulate landlords to offer better accomodation rather than paying 'lip service' and just accepting funding direct from social services. However, the obvious downside is that it will deter landlords from offering accomodation in addition to the tenant just spending the extra money.