Buy to Let Lenders say No to LHA Tenants

01 March 2012 Categories: News

Buy to Let Lenders say No to LHA Tenants

It seems that life isn’t bad enough for housing benefit tenants with the growing number of landlords overlooking them for properties…now buy to let lenders are starting to put stipulations in their buy to let terms and conditions that say finance will only be given if landlords agree not to have housing benefit tenants.

And what’s more it seems the government don’t feel the need to intervene.

A Parliamentary question posed by Green MP Caroline Lucas asked about the stipulations being imposed by buy to let lenders and whether the government felt that they were justified. She then went on to ask whether the government would be approaching lenders in a bid to have the restrictions removed.

Communities minister Andrew Stunell replied “While we are aware that some buy-to-let mortgage lenders prohibit the letting of properties to housing benefit claimants and restrict the lengths of tenancies, these are commercial decisions with which the Government would not seek to intervene.”

He then went on to say that around 30% of households in the private rental sector are in receipt of housing benefit and that the new lender restrictions wouldn’t have a huge effect on this number.

The new stipulations regarding housing benefit claimants are thought to be a result of changes in the payment structure for LHA. Before, the benefit payment was paid direct to the landlord however now it is paid to the tenant, and it is the responsibility of the tenant to pass the money on.