"Serious" problems seen with new housing benefit system

06/04/2009

Strong criticism of the new housing benefit system has been issued by an industry group.

The National Landlords Association (NLA) suggested that vulnerable tenants were currently losing out under the Local Housing Allowance (LHA), introduced by the government in April 2008.

Under the new rules, people entitled to the state benefits who had private landlords are now given the rent money directly - where previously it went straight to the landlord.

This could mean that some renters do not use the benefit money to pay their accommodation costs, leaving more and more to fall behind on their payments and eventually face eviction.

The LHA rules have also not gone unnoticed among private landlords themselves, according to a new NLA poll.

Just over half (52 per cent) said that they were now less likely to let rooms or properties to people on the benefits due to increased uncertainty over whether or not the landlords would be paid.

Richard Price, director of the NLA, said: "If landlords are opting out of this part of the market, where will these families go? The situation is now becoming very serious."

He added: "Empowerment is about giving people the right to choose. The current situation is not sustainable and the government must act to ensure that LHA tenants are not further disadvantaged."

Figures from the NLA revealed last week that one in three of all UK tenants were now in arrears with their rental payments.

Financial pressure from the credit crunch and recession - which has brought unemployment to a 12-year high - has contributed to the trend.

Tags; Income Worries and Debt, Credit Card Lifestyle, Recent Graduate Debt,

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