Finance News

Calls for benefit tenants’ rent to be paid to landlords

Em Morley - October 26, 2012

A recent move to pay housing benefits directly to landlords as opposed to tenants in Northern Ireland has provoked calls for the scheme to be extended throughout the U.K.

After lengthy discussions with U.K Minister Lord Freud, the Social Security Minister for Nothern Ireland has recently confirmed the move in a speech to the Assembly.

Important Change

In his address to members, Nelson McCausland was confident that the reforms would have a positive outcome. He said, ‘this is an important change as it will help to avoid rent arrears, with all the implications that can have for claimants and their families.’[1]

Calls for benefit tenants' rent to be paid to landlords

Calls for benefit tenants’ rent to be paid to landlords

 

 

Risk 

At present, Local Housing Allowance is deposited directly to tenants. It is also commonly expected that the new Universal Credit will also be paid to tenants. This has drawn concern from many private landlords who feel that rent may not be passed onto them. Studies have also shown the many tenants would feel more comfortable with rent being given directly to their landlord.

Financial responsibility

Despite the concerns, Ministers from the Department of Work and Pensions argue that giving payments to tenants helps to improve their financial responsibility.

However, Chris Town, vice-chairman of the Residential Landlords Association, feels that the moves in Northern Ireland should be replicated in the rest of the U.K. Town said that, ‘With 9.1% of all rent in the private rental sector being in arrears, this is a situation which is simply not sustainable for either tenant or landlord.’

‘Both parties in the Coalition before the general election pledged to introduce direct payments to landlords. Organisations working with tenants including Shelter, Citizens Advice and the Money Advice Trust all support tenants having the choice to have their rent paid directly to landlords.’

‘The Government should get out of the way and trust tenants to know what is best for them.’

’If it’s good enough for Northern Ireland it should be good enough for the rest of the country.’[1]

Registers

The Northern Ireland Assembly has also given the green light to rules that give councils the opportunity to build registers of landlords and in their operational areas. Head of Policy and Public Affairs at the Chartered Institute of Housing Northern Ireland Jennifer Donald, welcomed the move. Donald said, ‘The private rented sector has grown really rapidly here. It is now bigger than the social rented sector by 2% to 3%.’

‘These regulations are important, primarily to help us get a better sense of the private rented sector.’[1]

[1] http://old.lettingagenttoday.co.uk/news_features/Housing-benefit-tenants-rents-to-be-paid-to-landlords-in-jus-one-part-of-UK