A number of recent changes to the rules and regulations surrounding tenants on housing benefit means that Landlords in Norfolk and the whole of the UK should take extra care to adhere to the new legislation if they have any tenants on housing benefit within their portfolio. See more information.
These changes to Local Housing Allowance came into force on the 1st April 2011 and will affect any new tenancy moving forward. Additionally, the rules could also have a larger impact on the buy-to-let property market in Norfolk and throughout the country…
The revised maximum weekly rates for Local Housing Allowance are as follows:
¢ One Bedroom Property: £250
¢ Two Bedroom Property: £290
¢ Three Bedroom Property: £340
¢ Four Bedroom Property: £400
Clearly an incentive is needed to encourage some landlords to reduce their rent so that a benefit claimant can move in as a tenant. This incentive to the Landlords is that the rent due will be paid directly by the local authority for the first two years of the agreement, obviously meaning no chasing rent payments or time spend on admin.
That said, this rather small incentive could mean that the reduced housing benefit limits are likely to encourage landlords who currently do actively let to benefit claimants to perhaps look for a switch to private tenants to make up the short fall instead.
Any changes to the rules and regulations in this sector are likely to have a significant impact on rent fees, with many analysts predicting that this specific change is likely to affect the private rental sector as follow: If more landlords decide to switch to private tenants following the reduction in maximum housing rates, it may well increase the availability of rental properties at the lower end of the market, thus pushing down rent fees and making the lower end of the market more competitive. As in any markets, downward pressure on rent fees could even spread through the market to more expensive properties throughout Norfolk and the rest of the UK.