Scheme benefits landlords
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Kevin Paterson Sales and marketing director Assurant Intermediary
A government scheme to encourage private landlords to lease properties to tenants receiving Housing Benefit is gaining ground, with more than a million households benefiting.
The scheme - a three-way agreement between landlords, local authorities or housing associations and tenants - provides landlords with certainty of income for up to five years.
Rent is paid directly to them by the local authority or housing association involved.
A smaller number of arrangements are between tenants and landlords but this is seen as risky due to a change in the rules in April 2008 allowing Housing Benefit to be paid to tenants instead of landlords.
The National Landlords Association says the problem is so bad that some of its members are facing repossession as rent money earmarked for mortgage payments has not arrived.
The main disadvantages for landlords letting through the government scheme are that they must commit to the full term of the lease and can’t sell their property if they run into trouble.
But many see these drawbacks as outweighed by the guarantee of near-market rent for a set period of time.
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