Landlord News

Housing Allowance Rules to Alter Rent

Landlords in London have prospered as rental rates and yields went up in January, however, it has been revealed those that let property to people on housing benefits could be in for a more difficult year.
 
According to LSL Property Services’ Buy-to-Let Index, rents in London rose, on average, by 0.8% in January and they now stand at £1,032. This represents a rise of 6.3% on last year’s figures.

Furthermore, London landlords will be happy to see that rental yields increased by 5.1% in January. This figure is now 4.9% up year-on-year.

Richard Blanco, a London representative of the National Landlords Association, has been commenting: “What we are finding is because people are struggling to get finance to buy, they are renting and the rental market is benefiting. Rents are either holding up well or seeing reasonable rises. That’s true across London, my properties are in South East and East London and I have seen increases.”

However, those that let to families on benefits will now have to consider dropping their rent due to changes to the Local Housing Allowance rules.

Mr Blanco said that landlords would have to be careful when considering a rental price drop: “It is tricky because the rental market is quite buoyant, so they could end the tenancy and get in a young professional or a working family who are not on benefits. But their properties may not be in an area which attracts that sort of tenant, so in many cases landlords may have to cut their rents.”