According to recent estimates, the percentage of homes provided by councils has fallen year on year, falling to 7% in 2018.
In March 2020, the Local Housing Allowance (LHA) was increased to cover the bottom 30% of rents, but from April this year, it will be frozen again in cash terms, meaning the gap between rental costs and support available will start to widen again. The Joseph Rowntree
Foundation wants the government to reverse its decision to freeze LHA so that it is recoupled to the real cost of renting.
Darren Baxter, Housing Policy and Partnerships Manager at the Joseph Rowntree Foundation think tank, says: “The economic fallout from the pandemic has left millions of families worried about paying rent. The government should immediately introduce a targeted package of grants to support renters in arrears, ensuring that they can stay in their homes.”
According to the latest HomeLet Rental Index (March 2021), the average rent in the UK is now £922, up by 3.4% on last year. When London is excluded, the average rent in the UK is now £847, up 6.8% on last year. Ten of the Twelve regions showed an increase in annual variance, with the largest, as last month, being the East Midlands at 10.5%. The South West shows the highest yearly increase of 8% between January 2020 and January 2021.
Leading industry experts say housing support in the benefits system needs to reflect the average cost of renting in any given area.
Mish Liyanage, CEO of Pick My Pad, comments: “Many tenants on benefits are seeking affordable accommodation in the private sector and landlords should be embracing them. However, it is vital that landlords educate themselves on the requirements for DSS tenants. With this knowledge, they can run a very successful tenancy. But without the right know-how, landlords could in the worst-case scenario, lose money.
“For those landlords that are new to social tenants, it is important to understand the housing benefit system and payment cycle. LHA councils pay tenants two weekly, four weekly or calendar monthly so there is little point in a tenancy agreement that demands payment on different dates.
“For example, Bolton council’s 1-bed rate is £90.90 and Salford council’s 1-bed rate is £138.08. Hence there is a massive difference and social landlords should be aware of this,
“We have currently over 400 tenants on benefits and achieve a rent collection record of over 90%. Many tenants do not want the hassle of dealing with housing benefit and they want the convenience of it being sorted for them. Although many understand that they need to apply for housing benefit, they prefer if the landlord or an agent can assist them with doing this on their behalf.
“The temptation to spend housing benefit can be far too great for tenants and often they fall into a debt trap by using housing benefit payments for living costs on a short-term basis. So if landlords can help tenants to avoid this temptation and providing the rent is affordable, there is the potential of a long and secure tenancy to be enjoyed by both parties.
“At Pick My Pad, the leading provider for social housing in the north-west of England, we warmly welcome tenants who are in receipt of benefits such as Personal Independence Payment (PIP), Housing Benefit, Disability allowance or Universal Credit (UL). We pre-qualify all enquiries and carry out reference check and where applicants are not able to meet certain requirements such as guarantors or deposit, Pick My Pad assist in securing rental deposit certificates/Rental Bonds from local councils.”
