HB cuts lead to landlords slashing rents

Recently the new Chancellor of the Exchequer, George Osborne, announced his emergency budget, which included a range of measures and cutbacks that would enable the coalition government to save money on public spending and help reduce the public deficit, which is now huge. Amongst the cutbacks that were announced were benefits cuts and freezes, with housing benefit being one of the areas to be affected.

As part of the cutbacks the government announced that housing benefit would now be capped at a maximum of £400 for a four bedroom house. This means that many people that are living in private rented accommodation will be forced to find extra money to met their rent payments once the changes come in next year.

In some cases households could be left looking for hundreds of pounds a month to meet their rent payments, which could lead to many struggling and facing eviction. As a result of this landlords are also going to be affected, and those that want to continue to offer their homes to housing benefit tenants will have to look at slashing their rents in order to ensure that tenants on HB can afford to remain in the home.

Chris Norris from the National Landlords Association said that landlords would have three choices. They would have to cut their rents to ensure that they remained affordable for housing benefits claimants. If not, they could choose to offer their property only to tenants that are working and do not receive housing benefit, which would be far more restrictive. Finally they could choose to sell the home.

Norris said: “Landlords will have to look at their profit and loss and decide how much they can afford to cut their rents by. If they are not going to do that, they will have to seek non-housing benefit tenants or sell up.”