It was the film 28 Days Later that gave viewers the iconic view of an abandoned London; eerily empty streets, landmarks standing isolated and alone, and a desolate silence broken only by an occasional gust of wind propelling plastic bag tumbleweed about an empty Trafalgar square.
Some commentators are predicting that the situation may not get quite this bad in our major towns and cities, but we could see a good number of tenants leaving more expensive areas as a result of the expected change in legislation.
Change is coming...
Much debate has been stimulated by the Coalition Government's announcement of plans to make changes to the Housing Benefits system. Under the new plans, Housing Minister Grant Shapps has confirmed that from April 2011, the amount of funding available to Housing Benefits recipients will be reduced to one third of the average rent for the area in which the claimant resides.
The overhaul of the system and reduction in funding has sent ripples through the housing and rental sectors as some industry experts anticipate mass movement by tenants to more affordable housing. With an estimated 750,000 people likely to be affected by the benefits cut (including 15,000 families), towns and cities could be the places most liable to lose residents as affected tenants look to relocate to cheaper areas.
Bad news for landlords?
Landlords renting to tenants claiming Housing Benefits may well become nervous as April 2011 draws closer. But by taking a few simple steps over the coming months, landlords can adequately prepare for the times ahead. The following suggestions could help:
1) Protect yourself and your property The first step should be to protect yourself and your property (if you haven't done so already).
One of the benefits of some landlord insurance policies is Legal and Professional Fees Cover. This could prove essential as it provides cover for a variety of risks including; protection against the costs associated with the pursuit of rent arrears or if a tenant is in breach of any of their obligations under the tenancy agreement.
2) Talk to your local authority or district council
• Do they have a helpline for concerned landlords? • Are they holding open meetings on the subject? • Have they produced a leaflet or websites giving advice?
As one of the bodies involved in implementing the change at grass roots level, they should be able to advise you as to the best course of action over the coming months.
3) Talk to other landlords and lettings agents
Other landlords will be going through the same concerns at the moment. Sharing your thoughts with them may help you all to develop a better understanding and devise a course of action for coping with the change. If you use a letting agent to rent your property, then ask if they can put you in touch with other landlords in a similar situation.
4) Consider re-pricing your rent in the short term
Although this isn't always ideal, it may be that reducing your rental costs in the short term allows your tenants to continue renting your property and avoid defaulting. It may be more cost effective to do this than loose your existing tenants and have the property stand empty while you advertise for new occupants.
5) Talk to your tenants
Don't forget to talk to your tenants! It may be that they already have a plan for coping with the reduction in Housing Benefits. Whatever the case; working together could prove the most effective way to prepare for April 2011.
Be open to ideas and be proactive
Above all else, being open to ideas and proactive could be the key to having a successful strategy in place well in advance of April 2011. Try to stay positive and address the issue now rather than putting off the important decisions.
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