Member Article

North East Housing Benefit bill rises to £484.m

The North East’s Housing Benefit bill has risen to £484.4m a year, with almost £1m going to just one Sunderland landlord – but one local property expert believes the figures don’t tell the whole story.

27% of housing benefits - £131.3m - paid out last year in the five Tyne and Wear local authority areas went to private landlords, with the other 73% going to social landlords.

One Wearside landlord alone made £905,311 from housing benefit, with two investors renting out homes in Gateshead made £676,836 and £470,075 respectively from welfare payments made to low income families.

12.4% of people on the North East rent from private landlords – the lowest percentage in the UK – while 22.9% rent from registered social landlords, the second highest rate in the country.

Research from Knight Frank has show that the number of homes being privately rented has grown by 134% over the last 20 years – with the proportion of homes rented from local authorities halving in the same period.

Property expert Ajay Jagota, founder and Chief Executive Officer of the North East’s most innovative sales and lettings business KIS, responded to the figures.

The property firm is famous for being the first letting agents in the UK to abolish deposits, replacing them with a one-of-a-kind landlord insurance policy offering guaranteed rent, deposit replacement, legal assistance and round the clock third party emergency home repairs.

Ajay has been an outspoken critic of landlords who refuse to rent to tenants on benefits.

He said: ““What’s striking about these figures is while 10% more people rent from social landlords compared to private ones in the North East, social landlords receive 46% more in benefits.

“Most of the media coverage of housing benefit focuses on the amount which goes to private landlords, with the implication that they’re all crooks on the make.

“As a pioneer of ethical letting it’s enormously dispiriting to hear things like the figures we heard from Citizen’s Advice this week claiming as many as 16% of privately rented homes are unsafe, but it’s nonetheless simply unfair to brand all landlords as profiteers and pirates.

“All landlords are doing is providing an essential service - they aren’t profiteering from people’s need for homes any more than Tesco are profiteering from their hunger, and the overwhelming majority of them do it thoroughly and considerately, with great concern for their tenant’s welfare – which is why at least 70% of tenants think they get a very good or good service from their landlord.

“What’s also striking of course is the potential size of market for landlords prepared to rent to tenants on benefits. It goes to show yet again that landlords who refuse to rent to tenants on benefits aren’t just immoral, they’re illogical”.

Last week’s Queen’s Speech revealed plans to give 1.3m housing association tenants in England the right-to-buy their properties, and also that 18 to 21-year-olds are set to lose their entitlement to housing benefit.

This was posted in Bdaily's Members' News section by Ajay Jagota .