A recent housing benefit cap, has left many landlords up and down the country out of pocket, with some landlords reporting a 50% drop in revenue.It might seem to be quite a bad time to be a landlord, but one industry expert has pointed out that there is hope for new and existing landlords taking on LHA benefit tenants.
Some landlords are facing financial hardship, as some tenants fail to pay the difference between the local housing authority allowance and the monthly rent.
It can seem pretty bleak to be a landlord right now, but Aki Ellahi, director of Dssmove an online forum for tenants, landlords and letting agents, believes that landlords should not be put off taking on tenants on benefits.
His advice to any potential landlords out there, concerned about taking on housing benefit tenants, is to carry out a series of checks on the tenant.
These checks, “seeing evidence of a potential tenant’s benefit income, seeing what LHA allowance they have been given, and checking to see if they qualify for the full LHA allowance.”
In addition, landlords should make it very clear that the tenant “will have to pay the difference between the LHA allowance and the monthly rent.”
Top up payments
That’s good advice for anyone planning on becoming a landlord, but to landlords who are struggling to make ends meet with their tenants, Aki suggests two options. The first is to simply evict the tenant and face a period with no rental income. The second however, is to negotiate a series of top up payments to cover the difference between the LHA allowance and the actual monthly rent.
Whatever option they choose, it’s clear that landlords cannot simply keep their heads in the sand over this issue. The rental cap has meant that, “it is time for landlords to review their rental charges for LHA tenants and bring the more in line with the private rental market,” says Aki.
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