Written evidence submitted by North West
Landlords Association
SUMMARY
We express concern that insufficient incentives to
work, plus a lack of work in some areas, mean that the proposed
reduction in LHA payments will not result in a reduction in unemployment,
but will trigger detrimental changes to society, as well as to
the viability of the private rented sector. The difficulties experienced
by those outside London, who lack the twin benefits of a late
night Tube system and deregulated buses, are highlighted.
THE
NORTH WEST
LANDLORDS ASSOCIATION
LTD
The North West Landlords Association Ltd (NWLA) represents
about 450 landlords and managing agents of residential property,
operating mainly in the north west of England. Our members range
from landlords of a single property to owners and managing agents
of extensive portfolios. The NWLA is a member of the British Property
Federation (BPF) and of Authorities and Landlords Improving Standards
(A&List) which promotes the accreditation of landlords. Accreditation
is voluntary process to identify quality in residential accommodation
by assessing a landlord's properties and management arrangements.
Incentives to work and access to low paid work
1. Last year, I made a submission to the W&P
Select Committee Inquiry into the LHA on behalf of the North West
Landlords' Association and in January 2010, representing the British
Property Federation, I gave oral evidence to that Committee. It
was evident that many of the Committee MPs had a detailed understanding
of the problems facing benefit tenants who start work, sometimes
informed by the plight of their own constituents. MPs such as
Frank Field and Iain Duncan Smith have detailed the case for removing
the Poverty Trap which results in an insurmountable hurdle for
the unemployed when they start work and lose a range of benefits.
2. It seems that the empathy felt by the MPs
is not shared by the civil servants at the DWP. This Department
has displayed a long-standing resistance to addressing the Poverty
Trap.
3. It may be that the London-centric civil servants
do not perceive how different life is in the provinces for those
in low-paid work.
4. Transport home for the low-paid who work unsocial
hours in the provinces is patchy at best, an example being the
difficulties experienced by hotel staff in central Manchester.
Here we have no Tube system and the buses are de-regulated.
5. The introduction of BRMAs has been justified
as a welcome simplification of the system. This has, however,
created some anomalies and unfairness. BRMAs which contain very
disparate sub-groups are less of a problem in London, with its
greater ease of movement, than in the provinces. There one can
be forced to live in the cheaper area of the BRMA and be unable
to access the transport need to reach areas of employment.
6. Another administrative simplification is the
removal of the Rent Officer's input as a judge of the quality
of accommodation. Landlords do not have to meet the standards
imposed by the Rent Service or suffer a loss in rent: all within
the same BRMA now get the same rate, dependent only on the number
of bedrooms provided and irrespective of the size or quality of
these.
7. These changes seem to me to have provided
savings to the system, some of which could and should have been
devoted to alleviating the Poverty Trap.
8. The DWP seems irrationally resistant to putting
in train the simplification that would make a real difference
to the Poverty Trap. That is the rationalisation of the Housing
Benefit Regulations. Not only would that change make it easier
for a tenant to predict their level of support during the transition
to work, it would also save much costly administration.
9. Our landlords have observed problems for tenants
who start work when claiming Job Seekers Allowance. It seems difficult
to re-start benefits if the work is only of short duration, either
because it was not as advertised or it dries up and the tenant
is again unemployed. Those whose only choice is work that may
be of limited duration are understandably deterred by the risk
that starting work could be a costly mistake. These issues have
been addressed in TV documentaries; they are not unknown, merely
not engaged with.
10. Unexpected problems can arise. We had an
instance of a working mother whose partner was made redundant.
She was told that her daughter could no longer attend the nursery
she was in, as the partner was available to babysit. He decided
to leave, as his continued presence was detrimental to his child.
It also restricted his ability to resume work, or attend interviews.
Somehow the rules are too restrictive and act as a deterrent to
work.
Levels of evictions and the impact on homelessness
services
11. It is undeniable that the reductions of rent
envisaged for the next few years of the LHA will precipitate major
problems for many landlords who will be unable to service their
mortgages. Repossession must follow, as the situation will not
change back for some considerable time.
Landlord confidence
12. This forced inability to service debt will
result in a lack of confidence in a market which, despite its
imperfections, is providing a roof over the heads of many on low
incomes, or on benefits. With such a gloomy prospect for the Private
Rented Sector, it is not certain that there will be a supply of
landlords ready to take up the sometimes thankless task of managing
tenants with predictable problems. Who would take on an unemployed
tenant in an area of low employment, knowing that in a year their
benefit will be cut by 10%?
13. It is a retrograde step to remove the link
between market rents and benefit rents. We are only just recovering
from the problems of restricted labour mobility caused by regulated
tenancies, ended for new tenancies by the 1988 Housing Act.
14. It is also important to recall that the rented
sector shrank to a very small slice of the market under regulated
rents, as institutional investors left the sector. Some very big
institutional portfolios were sold on at a loss by the institutions
then.
15. Again, I feel that the information I am providing
is well-documented and well-known; it is being ignored, despite
the obvious problems that this will create in the medium to long
term.
Community cohesion
16. Arbitrary reductions in benefit rent levels
will force landlords to preferentially house those in work. Although
one may take a moralistic attitude and criticise the unemployed,
some of those without work are willing but unable to work, either
because of illness or a lack of jobs in their locality. No amount
of rent reduction will change that. What will happen is that people
will be forced to move to areas where rents are low because work
is scarce and transport to areas of work is poor or expensive.
This will break up mixed communities, with housing benefit ghettos
becoming established. Much good work in creating mixed communities
will be thrown away. It is sadly much easier to break something
than to mend it. Short term cost savings will be more than outweighed
by the medium to long term costs of creating workless ghettos,
which will of course have to be remedied in time.
Older people, large families and overcrowding
17. The small number of families accommodated
in large houses in expensive London suburbs has attracted attention.
Is it possible to house large families more cheaply in two adjacent,
modest properties?
GENERAL POINT
There should be a level playing field for landlords,
whether they are councils, housing associations or private sector
landlords. It is difficult to justify the automatic payment of
rent to the landlord if he is the council or a housing association,
and to the tenant if the landlord is a private sector landlord.
2 September 2010
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