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.

[UKPRwire, Wed Apr 23 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 fast property buyers National Homebuyers says, "Landlords and homeowners who need a quick sale are encouraged to seek alternative selling methods to the traditional estate agency route.

"The costs, delays and uncertainties of selling on the open market do not afford the homeowner the confidence of a guaranteed sale, as would a sale to a reputable national property buyer".

Mr King is a director of the UK's leading fast home buyer, National Homebuyers. The company is also the UK leader in Sell and Rent Back products where the homeowner can sell property quickly to release cash, but remain living in their home.

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