The government has promised to clamp down on irresponsible tenants who are paid housing benefit but do not pass on the money to their buy to let landlords.Welfare Minister Lord Freud has pledged to look at the problems tenants who “play the system” to live rent free.
Speaking at the British Property Federation’s Residential Conference, Lord Freud said government would consider landlords’ concerns over issues around tenant debt.
Figures last month revealed tenants failed to pay their landlords £276 million of rent in December alone.
Lord Freud indicated “extra protection” might be offered to landlords, who have to pay to evict tenants in rent arrears and have no chance of reclaiming the costs or lost rent.
“What I don’t like seeing is people messing you around and you losing 12 weeks’ rent every time someone does a bunk,” he said.
Lord Freud explained the government’ spent around £20 billion a year that accounts for 40% of the total private rents paid for about 1.5 million homes.
Buy to let landlords lose hundreds of millions in rent
“I am determined we have a constructive relationship going forward, over the long term, in the interests of both parties,” he said, confirming that landlords prepared to “meet us half way” by lowering their rents could expect a return to direct payment – where rent is paid directly to them by a local authority, rather than by tenants.
Ian Fletcher, a British Property Federation director, said: “It is heartening that Lord Freud has agreed to work with landlords to consider the small minority of people who play the system.
“If Government wishes the private rented sector to continue to play its vital role in housing vulnerable tenants then it cannot let people on housing benefit get away with living in accommodation rent-free, with landlords left to pick up the tab.
“The limited offer of a return to direct payment is welcome, but many landlords remain to be convinced that they should stay in the housing benefit market when they could easily take paying tenants, particularly in areas of high demand. Taxpayers deserve better than hundreds of millions of lost money each year that should be being paid out on housing.”