Earlier this year I blogged about reports of rising rent arrears in the private lettings sector and increasing residential rents. From yesterday, cuts to Housing Benefit came into force which is very likely to affect a significant proportion of private landlords. There are understood to be 50,000 people in receipt of Housing Benefit.
Over the last 2-3 years more and more private landlords have found themselves in receipt of houing benefit payments from tenants unable to meet their contractual commitments through unemployment or other chanes in circumstance. However, from yesterday (01 April 2011) cuts to housing benefit came into force which will mean that many tenants are going to have to deal with a significant rent shortfall or leave their properties.
The government has changed the formula for how the benefits are calculated and each of the changes are due to be phased in over the next 2-3 years.
It is predicted that in London alone, the changes will impact upon 17,000 households and the liklihood is that landlords will have some tricky decisions coming up and many of these tenants will shortly be facing possession proceedings unless they can find the extra money.