Property News

Councillor calls for rent caps on benefit tenants

Em Morley - May 6, 2016

The leader of Southend Council has proclaimed that he is in talks with the Government about the introduction of rent caps for tenants on benefit.

Ron Woodley, an independent councillor, said that his town is being treated as a dumping ground by London borough councils.

Struggles

Local Housing Allowance and the recent introduction of the housing allowance element in Universal Credit has seen many local authorities struggle to find affordable privately rented accommodation for the homeless. This is particularly true in more affluent areas.

Mr Woodley believes that London boroughs are sending these people to Southend as rents are considerably cheaper. Many London boroughs have market rents much greater than the Local Housing Allowance maximum of £26,000.

He believes that private rental charges to tenants on benefits should be reduced to those currently charged to tenants residing in social housing.

Affordability

Woodley observed that this, ‘would save the Government something like £14bn a year in housing benefit and would make housing in cities like London more affordable, so you’d stop the London boroughs sending people out of London because it’s cheaper elsewhere.’[1]

‘In many European countries they have some sort of cap on what people can charge in rented accommodation and I think we need this to stop the private rented sector running out of control, which is what it’s currently doing,’ he added.[1]

Councillor calls for rent caps on benefit tenants

Councillor calls for rent caps on benefit tenants

Dangers

However, Richard Hair of Hair & Son estate agents, based in Southend, has warned of the dangers that interference in the market could bring.

Hair noted, ‘The Government has an appalling record of interfering in the property market and there have been suggestions not long ago by the Labour Party of capping rent. Anyone interfering in any market place does so at considerable risk to the market place.’[1]

[1] http://www.propertyindustryeye.com/call-for-rent-caps-when-properties-let-to-tenants-on-benefit/