The government is being urged to delay reforming housing benefit after it emerged that landlords are less likely to let to claimants under the new system being piloted.
Half of landlords surveyed said the new local housing allowance, which is paid directly to tenants and is based on the average cost of housing in an area, had deterred them from taking benefit claimants. In addition, nearly a quarter had decided not to renew existing tenancies because of the scheme.
The independent evaluation of the first nine pathfinders, commissioned by the Department for Work and Pensions, revealed a 10 per cent drop in the number of landlords renting to claimants.
The pathfinders were launched in November 2003, followed by a further nine in February 2004. The DWP intends to introduce legislation by the end of the year to roll out the allowance.
The study suggests the negative attitude of landlords is often explained by rent arrears or the fear of them, but finds the scheme’s difficulties do not appear to have been offset by expected advantages, such as speeding up benefit processing.
A second report on the pathfinders, released this week by Shelter, found that the proportion of landlords denying access to claimants was higher in the pathfinder areas. Benefit processing times have not improved but there is no evidence of increased homelessness or arrears.
Citizens Advice social policy officer Liz Phelps said a 10 per cent fall in the number of landlords renting to benefit claimants would be “horrendous” if repeated across the country. “The DWP must hold back before making any decisions on the roll-out to see whether this is a blip or a long-term trend,” she added.
A DWP spokesperson said only 2 per cent of landlords had reduced their property portfolios. And only 3 per cent of tenants had fallen eight weeks into rent arrears and now have their benefit paid directly to the landlord.