Call for Rent Caps on Properties Let to Housing Benefit Tenants

A local politician has called for rent caps to be introduced on private rental properties let to tenants on housing benefit.

The leader of Southend Council, Ron Woodley, believes London borough councils are using his town as a “dumping ground” when they cannot house homeless people.

Local authorities in wealthy areas are struggling to find affordable private rental housing for homeless people, as Local Housing Allowance, and now the housing benefit element of Universal Credit, is not sufficient enough to cover the high rent prices.

Woodley claims that London borough councils are sending people to Southend, as rents are cheaper.

Call for Rent Caps on Properties Let to Housing Benefit Tenants

In a number of London boroughs, private rent prices are far higher than the housing benefit cap of £26,000 per year.

Woodley believes that private rents for tenants on benefits should be capped to those charged in the social housing sector.

He says: “What I’m saying to the Government is they should be looking at the people living in the private rented sector subject to housing benefit and, over the lifetime of a parliament (five years), reduce rents down to that of social housing.

“It would save the Government something like £14 billion a year in housing benefit and would make housing in cities like London more affordable, so you’d stop the London boroughs sending people out of London because it’s cheaper elsewhere.”

He adds: “In many European countries, they have some sort of cap on what people can charge in rented accommodation and I think we need this to stop the private rented sector running out of control, which is what it’s currently doing.”¹

However, Martin Ransom of Pace estate agents in Southend, warns that reducing returns for landlords could discourage them from renting to tenants on housing benefit.

Since Universal Credit began its rollout across the UK, many landlords have been concerned about changes to their tenants’ finances. There have been reports of tenants being forced into long-term debt by the waiting times between payments.

Additionally, Judith Cordoran, the Chairman of the South Essex Association of Landlords, believes introducing rent caps could exacerbate the homeless crisis in Southend, but she says she is willing to discuss the matter with Woodley.

She explains: “Landlords either take tenants on DSS or they don’t. We don’t, but if you think about the economics of a scheme like this, you will end up with only the very low quality, unrepaired houses that have belonged to landlords for 50 years, at the low price Mr. Woodley is suggesting.

“I’m a huge supporter of his, but we just need to have detailed conversations and he needs to come to the association meetings held at the council offices and understand from the people who attend those meetings the reality of the situation.”¹

Do you believe that rent caps would help resolve this issue? 

¹ http://www.echo-news.co.uk/news/local_news/14468208._Reform_rent_system_to_keep_Londoners_out_of_south_Essex_/