More Changes coming regarding Housing Benefit

It is pretty common knowledge that the Government recently announced they were going to be reducing Housing Benefit/LHA (local housing allowance) considerably and you wouldn’t be alone in thinking that if you are a landlord who has tenants on LHA then this would effect more people in London than here in sunny Dorset!! However, what isn’t being widely spoken about is the single person.

The Single Room Rate (SRR) is being risen from the age of 25 to 35. Currently if you are under the age of 25 you are only entitled to a room rate (a bedsit or room in a shared house). However in April 2011 this will change for all new claimants. If you are under the age of 35 you will only qualify for SSR.

For those who are currently in a one bed flat between 25 and 35 the government have extended the change to January 2012. This could spell trouble for Landlords who fall into this category. Their tenants in effect will have no choice other than to move to a bedsit or shared house or risk falling behind in their rent.

Single tenants under the age of 35 will not like moving from a self contained one bedroom environment to a smaller property like a bedsit or into a shared environment in a house/flat.

The bad news for Landlords will be those whose tenants fall into rent arrears, they will have no choice other than to evict them because the current rules state the council will not re-house anyone unless they are evicted. To move out prior would be deemed as making themselves ‘voluntarily homeless’, oh and YOU the Landlord has to bear the brunt of the court costs.

So, if you are a landlord who currently rents one bedroom properties to single people under the age of 35 either be prepared to not renew their tenancy next time round and try to rent to a couple or insist on a guarantor (at least you will have some re-course if arrears develops)

The good news is of course for Landlords who have HMO’s (houses of multiple occupancy) as these will be in popular demand. The new trend going into 2011 will be Landlords either expanding their portfolio’s with HMO’s or brand new landlords investing in large houses to turn into HMO’s.

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The Wonderful world of Lettings

September saw record numbers of lets, which was good news for Landlords. October has been very good. Rent arrears have started to fall across the UK which is a good sign in the right direction as this rose by 55% nationally.

A recent ARLA research showed an increase of rental properties coming onto the market because they can’t be sold, this is a sign of ‘Reluctant Landlords’ coming back to the market.

The cap on Housing Benefit on higher rents (which will affect London mainly) will see tenants looking for cheaper rents and looking to move into the outer regions.

However a wise word to Landlords whose properties are currently vacant.

If you have a property due to come up for rent or is currently empty, you could be in danger of this remaining empty into the New Year. This time of year is known for slowing down as we enter December and into the Christmas period. You may need to look at reducing your rental price slightly to attract those looking around. This time of year tenants can bag a bargain. Two months loss of rent due to a property being empty will take along time to recoup. Where as renting at a lower price not only continues to bring in an income, but is also healthy for the property to be lived in over the next cold and wet months.

Please also remember that if your property is empty for more than 30 days, you should be notifying your Insurance Company. Heating should be left on low to maintain an even temperature.

If you do have an empty property or would like a free friendly chat regarding your current situation, please telephone Move On Rentals 01202 711169.