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Wednesday, June 23, 2010

LHA Landlords to be hit

After the relief of many landlords in the emergency budget that landlords were not going to be hit by a Capital Gains Tax bombshell. Sifting through the less headline grabbing announcements; it is clear that one group of landlords will be hit hard by the proposed budget changes.

This is landlords letting high rental value properties under the Local Housing Allowance.
Boy George's announcement that he was capping payments at £280 per week for a 1 bed flat to £400 for a 4 bed house will have a big impact on landlords letting to tenants on benefit in the more expensive parts of London. The latest figures from the Valuation Office (VOA) show that the rent available to a landlord letting in Kensington & Chelsea is £350 per week. Therefore, the cap will have a massive impact on landlords letting in these areas.

Property Hawk has always been critical of the way that the LHA introduced changes to the way that payments were made taking away the option for private landlords to receive rental payments directly from the Local Authority. However, the fact is that many savvy landlords were making a 'good living' out of using the certainty and 'generosity' of the LHA rent system.

London landlords in high value areas letting to tenants on benefit look to be the big landlord losers in the budget. However, with rental demand in the city high, these landlords I'm sure will have no problem filling their rental properties. They just wont have the security of the state standing behind the rental payments any more!

Landlord insurance - budget busting rates

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