Landlords face benefits blow

THOUSANDS of landlords will miss out on Jeremy Hunt’s housing benefits rise next year, a think tank has warned.

The benefits cap freeze will block many landlords from receiving any of the Chancellor’s £1.3bn increase in housing benefits payments next April, according to the Resolution Foundation.

This is because tenants affected by the freeze will not be eligible to receive the additional housing benefits, and therefore cannot pay it to their landlords.

Private landlords house 1.6m social tenants, who get all or part of their rent covered by housing benefits.

These payments are set according to local housing allowance (LHA) rates, which have been frozen at September 2019 levels since the start of the pandemic.

Since then, rents have soared at record rates, meaning many tenants have massive shortfalls between what they need to pay their landlords and what they receive from the Government, leaving them at risk of arrears.

The Chancellor pledged to raise LHA rates next year to reflect rent growth over the last four years. This amounts to an average rise of 16pc, which will be worth an extra £25 per week in typical rental payments, the Resolution Foundation said.

But in places where rent growth has been particularly strong, the increase will be higher. In Kensington and Chelsea, the increase will be worth an extra £82 per week. This means landlords could get up to £4,264 in extra rental payments a year.

However, thousands of landlords who let properties to people out of work will not receive extra cash because their tenants will be hit by the benefits cap.

Alex Clegg, economist at the Resolution Foundation, warned: “The benefit cap is set to wipe out the gains for many out-of-work house- holds with children.”

Landlords whose social tenants do not receive an increase in housing benefits payments will be less able to raise rents and will be more at risk of rental arrears.

A government spokesman said: “Our Autumn Statement measures are a major boost for low-income renters. The benefit cap plays an important role in ensuring our welfare system is fair for both claimants and the taxpayer.”