Housing benefits payments in four out of ten North East homes will rise this year – proving to one landlord that “blacklisting benefits tenants is beyond bonkers”  

The Department for Work and Pensions this week published the Local Housing Allowance rates – the allowances paid to people claiming housing benefits - which will take effect from April this year.

6 of the 16 categories for shared bedroom and one, two and three bedroom properties in Tyneside, Sunderland, Durham and Northumberland have gone up.

Recent statistics showed that rents across the region as a whole fell by 3.1% in the last month.

Landlord Fergus Wilson – who owns nearly 1000 properties in Kent – hit the headlines earlier this year when he issued eviction notices to every tenant receiving welfare and announced he would no longer accept applicants on housing benefit, with other large landlords threatening to follow suit.

Ajay Jagota of North East lettings business KIS Lettings believes the new LHA figures vindicate his view at the time that the move was “short-sighted”.

LHA rates for North East BRMA 2014-15

The firm manages properties for over 700 landlords and was named Letting Agent of the Year at the 2013 Landlord and Letting Awards.

Ajay said: “A lot of landlords are rightly very concerned that the government’s Universal Credit reforms will mean rocketing rent arrears when housing benefits are paid to tenants rather than them. But blacklisting all benefits tenants as a result is beyond bonkers, and these figures prove it.

 “Putting all moral considerations to one side, when North East rents are falling across the board housing benefits rates are at worst stable and tenants on benefits continue to offer landlords excellent rental yields compared to most people – just like they always have.

“At KIS we’ve taken steps to remove the risk of rent arrears becoming an issue by abolishing deposits and replacing them with a policy of asking new tenants to nominate a guarantor for their rent and creating a unique landlord insurance policy, meaning our landlords aren’t left out of pocket no matter what happens.

“Every tenant has to be considered on their own merits, but I would advise landlords to consider involving a third party in their tenancy agreements – and to always consider getting professional support from a high quality agent.”