Why not pay Housing Benefit directly to Landlords?

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14:03 PM, 9th January 2023, About 2 years ago 22

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Housing Benefit is paid to tenants to cover their housing costs (sorry for stating the obvious). There would be numerous benefits to landlords, tenants, Gov.uk and local authorities if it were paid directly. So why is this not already official policy or on @RishiSunak’s To Do list?

How would it work?
A tenant who is entitled to Housing Benefit already has Benefit Decision Notice showing the amount. The Landlord receives a copy of this as part of Tenant vetting.
Tenant agrees the contract with the landlord.
Tenant and landlord forward a copy of the contract to the LA and landlord completes online application. Done!

At the end of the tenancy, both the tenant and landlord will be legally obliged to notify the LA to end the rent. HB is paid in arrears so there is at least a month to arrange this at the end of the tenancy.

Here are the benefits:

1 To landlords: local authorities will inevitably be better payers than a low-income individual.
2 To Gov.uk: Although the Local Housing Allowances are below market rents, security of payment would encourage many landlords to forgo the extra rent in return for payment security. Result: LHAs can remain low without affecting the availability of affordable housing.
3 To local authorities: Agreeing to pay landlords directly would give an immediate boost to the availability of affordable local housing and reduce evictions which are one of LA’s biggest headaches.
4 To tenants: Dramatic reduction in the number of evictions due to rent arrears and a significant improvement in the supply of accommodation, which in turn will affect rents.
5 To Court system: Instead of CC and High Courts choked with possession and debt cases from tenants who receive HB but use it for other things, the Courts could focus the much small number of cases of genuine need.
6 To benefits fraud: This would also put an end to the fraudster tenants who pocket the HB and spend it on other stuff while paying no rent – it’s illegal and should be prevented at source, rather than taking landlords 6-12 months, £1,000s and months of stress to get them evicted.

I genuinely cannot figure out a downside (except for the low-lifes mentioned in 6). Have I missed something?

Surely Gov.uk, Local Authorities, Shelter and Landlords can unite on this to make the system better for all those on benefits and receiving HB?

London Landlord

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Comments

Paul

11:31 AM, 14th January 2023, About 2 years ago

As far as I understand it, there is one downside of direct payment. If they are fraudulently claiming or have not updated the council about a change in situation and are due less you as the landlord could be liable to repay. However if the tenant pays you this is not the case. I could be wrong however.

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12:48 PM, 14th January 2023, About 2 years ago

Hi Paul,

The law, relating to overpayments and their recoverability, was changed 16 years ago. From that date, if the cause of the overpayment, was due to the claimant misrepresenting their true circumstances or failing to report a change in their circumstances, culpability should rest with the claimant (tenant) rather than the landlord. There is also a large body of Upper-tier case law supporting the position of landlords which should be binding on councils & tribunals.

Virtually the same principles apply to Universal Credit overpayments creating the opportunity to challenge such decisions, rather than simply coughing up to DWP demands.

Regards

Bill

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