Does locality make a difference? The impact of housing allowance reforms on private landlords

Abstract

Housing subsidies are used by developed welfare states to ensure their citizens can access decent and affordable housing. This paper assesses the relative importance of individual and area level factors on the degree to which private sector landlords were affected by changes to Local Housing Allowance (LHA) in the UK. The changes were part of the government’s package of measures to reform LHA and reduce the welfare benefit bill. Multi-level modelling techniques have been applied to a longitudinal survey of 788 private sector landlords who had LHA tenants in 19 Local Authorities across GB. The analysis shows that whilst landlords were affected by reforms, area effects were not as pronounced as anticipated. In general, landlords were equally affected regardless of where they operate. The findings suggest tenants in the most affected areas have absorbed increases in their rent shortfall signifying income was not the overriding determinant of demand.

Keywords:

• Housing allowances
• private rented sector
• welfare reform
• area effects

Acknowledgements

Thanks are due to the DWP for funding the 2011-2014 evaluation. In particular thanks are due to Claire Frew and Rachel Tsang. The views expressed here are those of the authors alone and do not necessarily reflect those of DWP. Thanks are also due to all members of the consortium: Christina Beatty, Ian Cole, and Ryan Powell at Centre for Regional Economic and Social Research at Sheffield Hallam University; Peter Kemp at University of Oxford; Mike Brewer, Carl Emmerson, Andy Hood and Robert Joyce at Institute of Fiscal Studies; Ipsos MORI.

Notes

1. Barking and Dagenham, Blackburn with Darwen, Bradford, Brent, Cardiff, Denbighshire, Edinburgh, Exeter, Fenland, Hackney, Newcastle upon Tyne, North Lanarkshire, Perth and Kinross, Portsmouth, Rhondda Cynon Taff, Tendring, Thanet, Walsall, Westminster.