Direct Payments in Social Rented Sector

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    Interesting article in the Financial Times yesterday , to the effect that the new DWP minister, Katy Ussher, has stated that direct payments of Housing Benefit to social sector claimants( RSLS, HA and council tenants) will not be progressed because of the ‘credit crunch’.Wonder what hard pressed private landlords will make of this news?


    I am rendered speechless by this statement……..

    A firm reassurance that housing associations and other registered social landlords will continue to have a guaranteed revenue stream from their tenants has been offered to banks and other investors in social housing by Kitty Usher, the minister responsible for housing benefit.

    The government, she said, had no intention of paying housing benefit directly to social housing tenants – with the tenant then responsible for paying the landlord – a move that some had feared could jeopardise the income stream of social landlords.

    “We are not going to do that at this time,” she told the Financial Times. Her move is aimed at providing reassurance to the social rented sector and to banks and pension funds that lend to the sector.

    Until recently, housing benefit was paid directly to landlords in both the private and social rented sectors. But in a move to encourage financial responsibility, and offer tenants the choice of paying more for larger, more attractive properties, councils have started paying housing benefit to the tenant. The tenant is then responsible for paying the private sector landlord.

    The roll-out in the private rented sector of what is now known as the local housing allowance has led to an expectation that the government would do the same for council and other forms of social housing.

    However, given the financial stresses in the social housing sector, the government had no intention of going ahead with such a change at present, Ms Usher said.

    “I am deeply concerned, in view of the lack of credit in the wholesale markets, that those who lend to registered social landlords should not have worries that somehow the income of registered social landlords could be threatened,” by such a move, she said. “We will do nothing that could jeopardise the income streams of registered social landlords.”

    Her reassurances to the sector and its investors come as a survey of housing association directors showed three-quarters expecting to face “significant financial difficulties” as a result of the credit crunch.


    The lack of responses suggest that there appears to be little sympathy for private landlords faced with non-payment of rent by LHA recipients, Neil.Don’t know why? I have found most to be honest individuals or companies trying to make a reasonable return from letting property, some new to the market because they have property they cannot sell but still with mortgage commitments, others enticed into the market on the back of never ending TV programmes like ‘Homes under the Hammer’
    (repeats of which are being shown on terrestial television and satellite/Freeview and which were made well before the ‘sub-prime’ problems started to unravel and there was buoyant housing market).With no rent payment then how are they expected to pay the mortgage instalment?For the minister to back off from this option for social landlords but not private landlords smacks of double standards.Time you guys mobilised as a united group and approached the minister for an explanation.

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