New Government Policy will Breed Rogue Landlords.
Since the 1st of January 2012 thousands of tenants have been on the move.
The Local Housing Allowance shared room rate, which applies to most single people under 25, as of 1st January has been extended to people aged under 35. This will inevitably affect tenants who rent from, or are considering renting from, a private landlord and claim Housing Benefit.
Under the new rules, new claimants will only be entitled to the lower rate of housing benefit for a room in shared accommodation until they reach the age of 35. People currently living in these circumstances who receive more than the lower rate will have a period where their housing benefit will be protected, but when the protection runs out they will only receive the lower rate.
Meaning by extending the shared room rent to single people under 35, approximately 88,000 people will lose an average of £45 a week in housing benefit.
According to The Chartered Institute of Housing “within a generation there will be towns and cities all over the country where there is “no accommodation with a rent within the reach of people whose income is supported by benefits.”
The institute have also said that the chancellor’s proposals “will hit low income households hard during the recession, precisely when they are most in need of support”.
Inevitably, with so much tenant migration happening at the moment, workers are going to end up a long distance from their workplaces, a challenge for those unable to afford high travel costs. Young people will be shifted further away from their schools, in some cases just before taking key examinations. And in some cases carers will find themselves far away from sick and disabled relatives & grandparents a long way from grandchildren; for whom they helped to care for.
Landlord Referencing truly believe that this is going to create ghetto’s and make the most vulnerable tenants even more vulnerable.
Inescapably breeding more rogue landlords into our society that we at Landlord Referencing are working so hard to fight against.
Coupled with the impending Universal Credit feature of the Welfare Reform; what will the consequences be for the GOOD landlords & letting agents out there?
Today I interviewed Stacie Price; a local Property Manager & Tenant Liaison Officer from Somerset who troubleshoots claimant tenants problems daily, to get an in-depth view of how this is currently affecting them, their tenants & their company and what they predict for the future of the letting market in 2012 and beyond.
How long have you been a property manager for?
This will be my 12th year in my role as Property Manager & Tenant Liaison Officer for a well established local landlord.
How many properties & tenants do you manage?
Approximately 90 properties with 100+ tenants in residence at the moment.
How did you prepare your company for the policy changes?
First thing we did was contact the council to find out when each tenant’s under 35 rate would drop.
That way it wouldn’t be a shock to us or the tenant.
How did you prepare your tenants for the policy changes?
We are making appointments for each individual tenant to come into the office to try and discuss a way forward.
This we are still in the process of doing.
How have the changes affected your company so far?
We have had to downgrade some tenants to cheaper properties.
How have the changes affected your tenants so far?
Most of them are anxious and scared of what will happen when the changes take effect, especially those who don’t have the support of a family around them.
How do you think this is going to affect your company, long term?
It will be a lot harder for under 35’s to afford a property with us unless they go into shared accommodation (which is limited) or are part of a secure partnership.
How do you think this is going to affect your tenants, long term?
Those that we can’t rehouse would have to move and find cheaper alternative accommodation but seeing as the majority of people will be looking for this I’m sure it will be extremely hard to find.
I spoke to someone from the council yesterday who is already being inundated by people they cannot help because they don’t have a duty of care to,meaning they are considered not to have a vulnerability, so therefore do not qualify for council help.
This is going to add to the homelessness crisis which is already at high levels for the time of year.
What feedback have you had back from your affected tenants?
Those we have moved have been extremely grateful. The others we are trying to assist are naturally anxious and worried as they know their present accommodation is not secure any more, as it will be beyond their financial limitations.
If what I heard yesterday is true then the pending Olympic games could also lead to a new homelessness crisis, as two homeless people came into my office today. They told me they were being encouraged to leave London and even given travel warrants because the government wants to give the impression that there is no homelessness issue in this country. . .
How true this is I do not know, but it does make you think.
So I have arranged an appointment with them for today, to see if I’m able to assist them in any way.
What do you think should be done?
I believe that the government are making a huge mistake, which they should stop and have a serious rethink about. Bringing this new under 35’s ruling in will just add to the homelessness problems that are already rife in this country. I think it could also create a gap in the market, which rogue landlords will be able to take advantage of, by offering below standard cheap accommodation in order to make a quick profit.
It is already hard enough for under 25’s to be able to find affordable accommodation, by increasing the age limit will make it even harder all round and leaves me wondering; how can this be the ideal solution to an already increasing problem?