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Southwark in private rent cap negotiations

Southwark Council could be the first UK local authority to introduce a rent cap for private landlords to make their homes more affordable to benefit claimants.

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The Labour-led authority’s plan is to set an ‘optimum rent’ for properties occupied by those receiving local housing allowance.

Southwark is concerned that a government LHA cap of between £250 and £400 a week, depending on property size, means it will not be able to find affordable accommodation for LHA claimants in the private rented sector within the borough.

The LHA cap came into effect in April 2011 for new claimants and is being phased in for existing tenants from January this year.

Southwark has already struggled to place people in receipt of LHA in the private rented sector since the rate was dropped to the 30th centile of average rent in April last year.

The optimum rent plan is being considered through the Southwark housing strategic partnership, which includes private landlords.

Signing up to the scheme would be voluntary and the level of the optimum rent is yet to be decided. Southwark is in talks with private landlords to find a maximum rent they will accept. It has not been decided when it might be implemented.

Ian Wingfield, cabinet member for housing at Southwark Council, said: ‘We are trying to reach some [sort of] optimum rent so people are not priced out of their homes.’

There are 30,000 households in the private rented sector in Southwark and of those 5,340 receive LHA. There are more than 20,000 on the council’s waiting list.

Mr Wingfield said landlords who do not sign up would not have tenants referred to them by the council’s social lettings agency. Tenants would be unlikely to approach landlords themselves if the rent is too high.

Chris Norris, head of policy at the National Landlords Association, said: ‘Landlords in Southwark, and beyond, who choose to let to housing benefit tenants already aim to set rents at a level at which they and their tenants will find workable, based on LHA and in line with their costs.’

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