Benefits changes for tenants 'cause problems' - buy to let mortgages

08 April 2009

Millions of pounds are wasted each year due to a change in benefit laws for tenants, it has been claimed.

The National Landlords Association has stated that the introduction of local housing allowance (LHA) - which saw money for rent being given to occupants rather than being paid directly to owners - has had negative consequences for investors.

It explained that many tenants do not pass on the cash to landlords, causing arrears to build up on some buy to let mortgages.

Research conducted by the organisation showed that 52 per cent of property investors are now unlikely to let a home to a person on LHA.

"It is clear that LHA is not improving access to housing and has actually reduced tenant choice," commented director of the body Richard Price.

Recently, Citizens Advice, along with Shelter and Crisis, launched a campaign to protect tenants from the threat of repossession.

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