Landlords Warn Government of Disastrous Housing Benefit Cut

Landlords have spoken out to warn the Government of its disastrous plans to cut Housing Benefit for under-21s.

Many property professionals believe that the cut will bar most young people from the private rental sector, while charities have warned that the decision could leave thousands at risk of homelessness.

Amid widespread anger among charities at the decision to strip Housing Benefit entitlement from single people aged 18-21, the National Landlords Association (NLA) claims that one effect would be to put off most of its members from housing young tenants on benefits.

“The message that will go out from these changes is that 18-21-year-olds don’t have automatic entitlement to Housing Benefit,” says the Chief Executive of the NLA, Richard Lambert. “Yes, there are all these exceptions in the actual policy, but the nuances won’t cut through. I wouldn’t go as far to say young people will be totally excluded, but they’re going to find it very, very difficult.”

The Residential Landlords Association (RLA) has also spoken out, following research among 1,000 landlords that show that 76% fear the measure will leave under-21s unable to pay their rent, making landlords less willing to let property to this age group.

It’s Vice-Chairman, Chris Town, explains: “Cuts to Housing Benefit will make it risky for landlords to rent to those receiving it. Rented housing is crucial in enabling young people to quickly access work and education opportunities. By making it more difficult for them to secure rental properties, ministers are making such prospects increasingly difficult for them.

Landlords Warn Government of Disastrous Housing Benefit Cut

Landlords Warn Government of Disastrous Housing Benefit Cut

“We call on the Government to think again and use the Budget to reverse its plans to cut Housing Benefit for the under-21s.”

The change, first suggested by David Cameron in 2012 and outlined in the 2015 Conservative Party manifesto, was pushed through without much publication in a ministerial direction to Parliament late on Friday.

It means that, from 1st April, new single claimants aged 18-21 will not be entitled to the housing element of Universal Credit, unless they fall into certain categories.

The exceptions include people with children or those where continuing to live with their parents would bring a “serious risk to the renter’s physical or mental health”, or would otherwise cause “significant harm”.

While such categories are broad, homelessness charities warn that to prove such potential harm would be so difficult that many young people would instead opt to sleep rough or sleep on friends’ sofas instead.

Kate Webb, the Head of Policy for Shelter, says: “As we’ve seen before, the bureaucracy of the welfare state is not good at capturing people in delicate situations. This is particularly so if we’re talking about 18 or 19-year-olds who have suffered really unpleasant, very personal things at home, and don’t want to disclose that to someone.”

Webb said that even those who wished to claim the exception would struggle to find a landlord willing to take them on.

“If you’re a landlord now, every 18-21-year-old is at risk,” she claims. “You have no reason to believe that someone will be eligible for an exemption. The idea this is going to work in practice is fanciful. It’s a real worry – there is no way this isn’t going to lead to an increase in rough sleeping.”

Balbir Chatrik, the Head of Policy for Centrepoint, reports that the charity’s research indicated that the changes would put up to 9,000 young people at risk of being unable to find somewhere to live. The practicalities of the exemptions amounted to “a catch-22 problem”, she says.

“You can’t get your tenancy without first having access to housing support,” she explains. “But you’ll need verification to say you will get housing support before any landlord will take you on. So you’re more likely to be out on the streets. It’s so ill judged. The exemptions are going to be a nightmare to prove.”

In addition, campaigners insist that the change is unlikely to save much money – one study put the maximum possible at £3.3m per year – given the small proportion of the welfare budget accounted for by young people.

They are baffled at ministers’ decision to push through with a policy that many people have predicted would be dropped just three weeks before it comes in, especially given the imminent revamp of general policy over homelessness.

Questioned about the Housing Benefit cut plans on Monday, Theresa May’s spokesperson said it had been designed with “a number of exceptions” and that it had been a long-standing policy commitment.

They continued: “The aim of it, as we have always stated, is to ensure that young people don’t go straight from school and onto a life of benefits.”

If you want to help the young people who may be affected by the Housing Benefit cut, it may be a good idea to let to them and protect your rental income against default.

Our Rent Guarantee Insurance policy ensures you still get paid if your tenant cannot pay, and includes cover for all tenant types: https://www.justlandlords.co.uk/rentguaranteeinsurance

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