Abuse of Local Housing Allowance is 'Nonsense'

Paul Shamplina of Landlord Action believes that recent accusations from the Department of Work & Pensions on private landlords abusing the system of housing benefits is "absol

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Millie Dyson
28th October 2010
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He stated:

"We are an easy target.  However, remember our role – we are providing accommodation to the government for social housing purposes – and we are are not doing anything wrong here. In fact, if anything, this is helping the government to address the problem of homelessness.  Then remember, landlords are not investing for fun (although investing can be fun) – they are investing for profit (as all investors, not just landlords)."

In an interview with Ruban Selvanayagam of PS Investor Services, Shamplina - who's organisation has assisted over 17,000 landlords since 1999 - believed that such claims are as a result of rental increases that have been witnessed in recent months.  He stated the government should be doing more to increase the supply of affordable housing, which should theoretically bring down rental prices - an opinion echoed by many professionals in the private rented sector.

Shamplina said:

"If landlords are putting a premium on the rent they charge due to housing benefit tenants, then this is a reflection of what they perceive is extra risk. However, with the new caps, there is very little room for landlords to put a premium on the rent. With this in mind, it is hard to see how ‘all landlords are abusing the system’.  Whilst we must accept that there always will be a small percentage of people who do abuse the system, the overwhelming majority are law abiding and aren’t doing anything wrong,"

Urging landlords to prepare themselves for an "age of austerity" mainly in terms of cuts on the levels of Local Housing Allowance being paid, Shamplina stated: "in many cases – especially the South of England and London – landlords will have a tenant who is receiving benefits which amount to less than the agreed amount of payable rent.

Therefore, whilst the government is doing its work towards reducing the deficit, it most certainly isn’t doing all it can to effectively combat homelessness. It seems that the result is going to be landlords losing out again – something that they are getting very tired of.

The danger for the government is that this is going to put off many landlords from letting their stock to LHA tenants, which means that supply shrinks whilst demand is ever increasing. I am not an economics professor, but this is usually a recipe for pushing prices (i.e. rents) up."

Shamplina also highlighted the organisation's campaign for faster evictions for anti-social tenants or those who are in rent arrears together with Mike Weatherley MP, The Residential Landlord Association and the Southern Landlord Association - "the petition already has over 2,000 supporters and many key organisations within the PRS are backing the campaign the, more landlords that get behind it, the better."
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