New scheme may put landlords off says National Homebuyers

Buy-to-let property investors have been dealt a blow, with the introduction of new rules regarding local housing allowance.

[ClickPress, Tue Apr 15 2008] The money paid to low-income people used to be paid directly to landlords, giving them a sense of security that payments will be made.

However, under the new scheme, the money goes to the tenant and it is then up to them to keep up with rental payments.

Andy McQueen, managing director of the Mortgage Works and UCB Home Loans, explained why some buy-to-let investors may not be too pleased about this.

"This scheme is a significant change from the existing procedure and relies on the ability of individuals who are unused to managing rent payments to budget effectively," he commented.

"Additionally, data from the National Centre for Social Research showed fewer problems occurred with rent payments when it was paid directly to landlords by local authorities, which suggests there may be some issues with this new scheme.

"Landlords provide a crucial function within communities, but any abuse of this system by a small minority could lead to landlords having to tighten their policies on renting accommodation to LHA [Local Housing Authority] tenants," added Mr McQueen.

Julian King of National Homebuyers adds, "This is an exceptionally difficult time for the property owner. Multiple property owners are proportionally affected.

"Any landlord facing difficulty as their investment fails to reap the benefits it may have some years back are advised to consider a quick sale".

Mr King is a director of National Homebuyers, the UK's leading fast property purchase firm that guarantees to make an offer to buy any property in the UK. The company purchases any UK property, regardless of its condition or location for property owners who need a quick sale.

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