Pindoria Solicitors often represents landlords on the repossession of their property. Since June 2010 emergency budget we have had more enquiries about the impact of the new Housing Benefits changes.
In its first Budget, the Coalition Government made a number of announcements on changes to Housing Benefit, and in particular to Local Housing Allowance.
The new measures are as follows:
- From October 2011, Local Housing Allowance rates will be set at the 30th percentile of local rents (instead of the 50th percentile).
- Deductions for non-dependants will be uprated in April 2011 on the basis of prices. This will reverse the freeze in these rates since 2001-02.
- From 2013-14, Local Housing Allowance rates will be uprated in line with the Consumer Price Index (CPI).
- From April 2013, housing entitlements for working age people in the social sector will reflect family size.
- Housing Benefit awards will be reduced to 90% of the initial award after 12 months for claimants receiving Jobseeker’s Allowance. This will be introduced in April 2013.
- From April 2011, Housing Benefit claimants with a disability and a non-resident carer will be entitled to funding for an extra bedroom.
- From April 2011, Local Housing Allowance Rates will be capped at £250 per week for a one bedroom property, £290 per week for a two bedroom property, £340 per week for a three bedroom property and £400 per week for four bedrooms or more.
- The Government contribution to Discretionary Housing Payments will be increased by £10 million in 2011-12 and £40 million in each year from 2012-13.
Any tenant currently in receipt of housing benefit is at risk of having the amount they receive reduced under a range of proposed changes announced in the budget in June
The new housing benefit impact shows landlords to accurately estimate the amount of income which could be at risk on the basis of their rental income, geographical area and type of housing stock. Landlords need to be prepared for the proposed changes to housing benefit which will hit their tenants hard as well as a risk to their property business.
Landlords will need to make commercial decision particularly for those properties in central London about the ability of a tenant on Housing Benefit be able to pay sufficient rent to a landlord. Landlords may need to be prepared to use the ultimate sanctions which to is repossession the property with a court order using the accelerate possession procedure.
For more details visit us at www.easylawyers.co.uk