Pathfinders
An Exception is made for tenants in receipt of Housing Benefit in Northern Ireland.
The government want people to have the choice of where they live and take responsibility for paying their rent. It is accepted that many tenants who have their rent paid directly to their landlords, neither know, nor care how much their rent is. However, if they return to the work place will they are able to budget for living expenses?
Local councils have now introduced 15 pathfinders in England Each month their local rents are published, enabling tenants to make informed choices. Where can they afford to live and can they find cheaper accommodation? The New Local Housing Allowance has increased considerably and most landlords felt that it was reflective of the housing market.
Case Study: Mike Stimpson - President of the NFRL
Mike has been directly involved in renting out properties under the pathfinders implementations: Mike felt that because his rents had increased considerable he did not mind sharing the extra money received in rent, with a good tenant - in the form of a cash back. The landlord is happy, he's receiving more rent and the tenant gets extra money back in his hand. This money given to tenants did not affect their other benefits. Mike talked about his experiences working with tenants in receipt of housing allowance (housing benefit) in his area - Brighton.
Mike is in receipt of 70 claims for housing allowance. Before direct payment was introduced he had a meeting with his local council and agreed the following:
- The first payment of each new tenant would be paid by cheque to tenant, but the cheque made payable to his landlord. This would alert the landlord that payment had started, hence reducing the risk of a tenant stating that payment had not yet started and then doing a runner after receiving several payments.
- He also spoke and agreed that certain tenants were more vulnerable (drink, drugs, in rent arrears, or he knew they simply would not pay their rent).
His local housing officer accepted this and has continued paying these payment directly to the landlord. No tenants have appealed this decision. 20 of his tenant have continued to pay their rent and have benefited from the cash back system. He had 20 tenants that he was not sure about. 2 of these tenants were paid mistakenly with their first payment made payable to them. Once their payments came in they simply cashed it and ran. However, the remainder of tenants have continued to pay enjoying the benefits of a cash back system. He has found that tenants stay longer with landlords who offer cash backs system. As tenants are in receipt of more money, they are generally spending it to make their homes more homely.
To protect landlords, the following measures were introduced: If tenancies were paid monthly, once the second payment was late by one day (paid every two weeks) the landlord could notify their local council and payments would be suspended. During this suspension it gave the tenant an opportunity to appeal if the information for late payment was not justified, otherwise the landlord would then start getting paid directly. Not only were the landlords being paid their rent, but the extra rent would quickly pay back any arrears. However, once the payments were brought up to date it would revert back to the tenant.
Some fears that the local housing allowance officers had:
Housing Allowance would push up the market rents - this has not been the case. Landlords are happy that the rents do reflect the local private rents being paid. In some parts, arrears can be better than others, the cheaper housing has benefited from a higher rent increase on the strength of better areas. We could have similar situation here. For example - South Belfast. The Lisburn Road/Malone Road is very expensive. However, rents in the Village area of the Donegall Road, are much cheaper. How would Housing Benefit allow for this?
