A landlord may not be for life – but should still be paid at Christmas

21 Jan 2011

Policy area: Residential

The property industry has again urged Ministers to keep to their pre-election pledge of restoring the direct payment of rent to landlords after new figures today revealed that 11.7% of all UK rent went unpaid in December.

The LSL December Buy to Let Index today showed that unpaid rent owed to residential landlords totalled £276mn across the UK in December, the highest total since December 2009. The proportion of all UK rent that was unpaid or late by the end of December rose from 9.7% in November.

The British Property Federation said a key reason was the previous Government’s removal of the direct payment of housing benefit to landlords – a policy that has lead to increased rent arrears and evictions and has caused millions of pounds intended to be spent on welfare to leak out of the benefits system.

The BPF said there was growing evidence that the issue was dissuading landlords from letting homes to housing benefit claimants, restricting the number of homes available to rent and upping the pressure on hard-pressed councils to find homes for those on council waiting lists.

While it is possible, albeit slowly, to recoup rent from tenants who are not Local Housing Allowance claimants the same safeguards are not in place for those who are – costing the taxpayer millions of pounds each year.

Landlord groups, alongside homeless charities, have campaigned for the return of direct payment since it was removed in 2008. Conservative Party ministers, including Housing Minister Grant Shapps, had pledged to restore full direct payment before the election.

Ian Fletcher, director of policy at the British Property Federation, said: “Christmas is an expensive month for all, with the pressure to ensure presents under the tree come the 25th. But Christmas should not be bankrolled by tenants not passing December’s rent on to landlords.

“The government persists with a policy that was designed to empower LHA claimants, but the truth remains that millions of pounds of taxpayers’ money is being wasted and not finding its way to the landlord.

“There is already growing evidence that landlords are shunning LHA claimants due to rental arrears - putting pressure on local councils at a time when their budgets are being slashed by Whitehall.”