In what will come as a devastating blow for some landlords, the Welfare Minister, Lord Freud, has decided to stick with the contentious decision to pay the housing element of the new Universal Benefit system directly to social tenants.
Landlords anticipate growing arrears problem
Landlords across the UK were hoping that the Minister would have a change of heart on the plan and it now seems that many landlords will be looking for more comprehensive property insurance to cover the rent arrears problem they can soon expect. The decision will be all the more disappointing because Housing Minister Grant Shapps had indicated on more than one occasion that he had sympathy for the argument put forward by landlords through their organisations.
Minister believes tenants should manage their own affairs
Lord Freud announced his decision yesterday in Harrogate where he addressed the Chartered Institute of Housing conference. He told delegates that the government believed that social tenants should be offered the chance to look after their own finances just the same as the rest of the population, but would consider developing the system to facilitate payments directly to landlords in certain circumstances.
Landlords will turn to alternative tenants
The feeling amongst landlords, who are already reducing the number of their properties they let out to social tenants because of the changes in the benefit system, is that the Government are creating a housing crisis by their actions. At a time when rental properties are in more demand than ever, many landlords can pick and choose their tenants. There are not many landlords claiming on an empty property insurance policy in the UK at the moment and they will almost certainly now opt for a tenant who is in work and not on benefits. The fact that a working tenant is usually a better financial risk than a social tenant is well known in the sector and with little possibility of the Minister changing his mind it may well be social tenants who suffer in the long run.
Squatter’s rights set to disappear
Landlords will be more upbeat about the new criminal justice bill that drew the attention of the mainstream press yesterday. The press concentrated on the Government change of mind on discounted jail sentences, but the bill also asserts that squatters will no longer have the right to apply for legal aid and not many landlords will object to that.