Nationwide 'concerned' about new housing allowance rules

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Nationwide 'concerned' about new housing allowance rules

Tue 8th Apr 2008

Nationwide Specialist Lending has sounded a note of caution as changes to the housing benefit system come into effect.

Previously low-income individuals had their rent paid directly to a landlord by the local authorities, but as of yesterday that has now changed.

Now, those eligible for the scheme with receive a local housing allowance (LHA) directly to pay their rent.

Andy McQueen, managing director of The Mortgage Works and UCB Home Loans, expressed concern that those "who are unused to managing rent payments to budget effectively" may struggle to meet their rent payments.

In addition, he noted that the National Centre for Social Research had found that fewer problems occurred when the local authority made payments directly to landlords.

"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 tenants," he warned.

The Department for Work and Pensions has said there will be safeguards in place for those who need helping managing their budgets.

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