Are Rent Caps Set to Become A Thing Of The Future?

05 July 2012 Categories: News

Are Rent Caps Set to Become A Thing Of The Future?

While Newark Borough Council is planning to licence all 35,000 private rental properties within its boundaries, Southwark Borough Council is trying to impose rent caps on landlords who accept LHA tenants in their properties. This news comes after recent statistics revealed that landlords in the area are refusing to lower their rents in return for direct LHA payments, simply because the demand for rental property in the area remains high.

The government capped LHA payments during 2012 using a two-stroke strategy and as a result councils in Londonare now worried that LHA claimants are going to be priced out of their homes unless rent caps are introduced as well. Southwark Borough, where over one sixth of the private rental properties are available to LHA claimants, is one of the worst affected areas ofLondonand as such the council is trying to implement a plan that will satisfy landlords and tenants alike.

According to early plans, landlords who refuse the rent caps will no longer have LHA claimants referred to them by the council, however the National Landlords Association’s head of policy, Chris Norris, has said that the rent caps will deter a lot of landlords from accepting LHA tenants anyway.

Whether the plans to introduce rent caps will be beneficial or counter-productive remains to be seen, however it is hoped they won’t become widespread.