Landlords refusing to take benefits recipients as tenants

[sarahquilt]

It's in the Guardian about major landlords refusing to take on people on benefits due to increasing levels of arrears - pretty controversial!

[LIZS]

But a significant number haven't ever , or their mortgage companies don't allow it. Nothing new really.

[Joules68]

If your 'on benefits' such as JSA/IS then all your rent (mostly) is paid for you so you don't get a chance to build up arrears..... So that's not accurate

[msrisotto]

Is it controversial that tenants with bad references or background checks aren't let to? And LIZS is correct, most mortgages don't allow it.

[LIZS]

I think the problem is that some people have relied on it covering up to 100% no matter how large the rental and now they are having payments reduced according to no. family members/accommodation required. Also if it is now paid to recipient rather than LL then funds could be used for other costs and ll doesn't always receive the full amount.

[MrsSteptoe]

Normally, I hate the idea of benefits being paid from government straight to service provider and skipping the person on benefits - like a kind of food parcel idea, as if they can't be trusted to shop for themselves - but with rent it's a tricky one. A few rogue tenants who have trousered their housing benefit rather than paying the rent to the landlord has doubtless been a contributory factor. Ruins it for the honest majority of tenants. I'm none too sure of the scale of the problem, though. Seems a bit much to refuse to take such tenants if it's just a few bits of anecdotal evidence. After all, it's not like rent arrears are unknown even among those with a good income.

[owlbegoing]

It would help if the councils benefits departments took their fingers out of their arses and worked through peoples claims with any amount of speed. When I have had reason to communicate with my council I have been told that it can take up to 6 weeks for then to process the paperwork "due to high volume." This excuse never changes so how about they take on more staff as in the current climate I'd suggest that more people are in need of benefits!

[PourquoiPas]

I think you mean this article -

www.theguardian.com/money/2014/jan/04/buy-to-let-landlord-evicts-housing-benefit-tenants

It's a shame for the tenants on benefits who haven't incurred arrears but you can see the landlords point of view. If he can't get insurance he's going to lose money, and it is hard to see how people will still pay their rent as the gap between housing benefit and rent goes up.

[stubbornstains]

Most HB tenants have always received their benefit money as a direct payment, and then paid it on to the LL themselves. When money is paid direct to the LL, it is normally for tenants in hostels, or housing that is supported in some way.....

.......yup, paying street drinkers who use short-stay hostels their HB directly- what could possibly go wrong? Apart, of course, from the councils & organisations that run these hostels having to close them because they suddenly have no income.

As for super hardnosed businessman's tenants;- in reality, he would have no idea which of his tenants are in receipt of HB- because they don't have to tell him. Ie:- if you're working as a cleaner and you're income's being topped up by HB, you just tell the LL you're working as a cleaner- and provide work references. If that invalidates the terms of his mortgage- hey, that's business, you've got to take the rough with the smooth .

[DontmindifIdo]

There was a good comment article on this in the guardian today, basically saying when the government brought the changes in they thought landlords would just have to accept it, that limiting what the state would pay in rent would force down rents, removing the assurances that landlords will be paid (or the option of direct payment) would just be something they'd have to accept. There was little thought given to the fact that in most areas of the south east, landlords can easily fill properties with tenants who aren't claiming housing benefit, so they will just not rent to the poorest and most vulnerable. It was shortsighted to think otherwise.

If the government wants to reduce rent levels, the only real way to do it is to reduce demand related to supply, so a huge building project of council properties (to remove a decent percentage of people from the private rental market), or mass building of private homes (more competition for tenants) or reduce the numbers looking to rent. One thing that struck about this case, the couple in Ashford are targeting Eastern Europeans who've been here long enough now to have decent credit histories, it was clearly a mistake to think those people would stay for one or two years then return to their home country. Limiting immigration would have a downward effect on rental costs, but sounds far too UKIP for sane politicians to suggest.

[Serenitysutton]

Stubborn stains what makes you think that? Very large landlords (housing associations etc) have always had direct uploads of rent to their systems of HB and the cash is paid straight into their bank account in one payment per council they cover. For all tenants, no just vulnerable ones.

The part I don't understand is how LL are finding out tenants are on HB- the councils in the pilots so far have refused to disclose whether they are paying HB to certain individuals, in fact the secrecy around it is proving to be a big problem. I can only think they're requesting bank statements.

[morethanpotatoprints]

My friend has several benefits and has come foul of late payments to herself through somebody not pushing the correct key, and other benefit bureaucracy. If she doesn't get her money her rent is late, fortunately her landlady is understanding. This has happened at least 6 times in the past year.

I am to become a LL soon and would prefer people on benefit because you know you will get your money even if late.
I have friends who say the worst tenants are the professional couples who can move at the drop of a hat.

A family on benefit will more often than not want stability for their dc and not want to be chucked out and have to move schools etc.

[stubbornstains]

I agree with what you're saying about the council Nancy- it is shocking. But then, employed tenants can lose their jobs- some of them without any notice- and do they all really have 2/3 months' worth of living expenses put aside in case the worse happens? Would they, then, not fall into arrears too?

I think campaigning for tenants' rights is in the interests of both tenants and landlords.

[stubbornstains]

Is that so serenity? I stand corrected. I've never been lucky enough to rent social housing- I've always had to rent in the private sector, where HB is paid directly to you (and I always pay my rent a day early- due to benefit claimant's inferiority complex )

[Serenitysutton]

Yes as long as the landlord is big enough to implement the systems to sync with everyone else's . Of course it's not going to happen anymore but that's always been the way it's paid historically.

[exWifebeginsat40]

Landlords can still get insurance on HB tenants if they have a Guarantor (who is a homeowner and employed with a spotless credit record). Will mortgage companies still not go for this?

I'm in the middle of separating from my husband and will be renting (private sector) on HB (am on Disability benefits). he is standing as Guarantor for me and I am hoping i won't have too many problems finding somewhere. this is really worrying me as I need to find a place soon.

[stretch]

What happens on when everything changes over to Universal Credit? We get some tax credits, no HB though, would we be classed as 'on benefit' for the purpose of getting a tenancy, because that would affect a huge number of people, surely?

[stubbornstains]

I would be really interested to see if there's been any real research into whether HB claimants are more of a risk that non- HB claiming ones as tenants (especially now that you factor into consideration the great swathes of working people that are now having to top up with HB), rather than just anecdotes about single mothers by Hard Nosed Businessmen.

(except that the responses would always be skewed, wouldn't they, because of all the tenants that could-and would-deny being on benefits!)

[Serenitysutton]

More than potato prints I'm afraid renting to HB claimants may well prove to be more risky now. There is no guarantee of rent, the situation is the same as private landlords- you will have to hope that they choose to pay you.

There is a higher incidence of vulnerability with social housing tenants which does make them more likely to not pay their rent- chaotic lives and addiction/ mental/ physical illness for example. This is not necessarily because they are on benefits but generally because these issues leave them unable to work. I'm not benefit bashing BUT it would be naive to ignore the reality.

[Serenitysutton]

X posted SS yes they are, arrears rates are generally accepted to be higher in the social sector (and is seen in companies who offer rentals across both the social and private sector which is common)

[morethanpotatoprints]

exwife

Apart from the splitting from husband, you are in the same position as my friend. I'm not saying it was easy for her, she had many refusals. In the end she was accepted by a LL who was a doctor and understood her illness. The LL also owned the house so no problem in terms of insurance and mortgage companies.

What part of the country are you? I don't mean specifics btw.

[DontmindifIdo]

I think from the article, the people they were serving notice on we're tenants who are not working at all, not just getting wages topped up with hb, so the most vulnerable.

They said those were the tenants most likely to be late /in arrears, thick is presented as the tenants being feckless, but in reality is probably more often due to fuck ups with benefit payments.

I've been working since before the millennium (am old), and I've never been paid late or significantly incorrectly (worse I've had is only being paid basic and not overtime), so I've never found myself unable to pay rent due that month, however everyone I've known who have had to claim benefits have had problems at some point getting the right amount if money on time. These might be people who are perfectly capable of managing their money and want to be good tenants, the government don't make it easy for them to do so.

[morethanpotatoprints]

Serenity

My dds friends parents mostly all rent from private LL and honestly they are really good bets.
They have been through enough and want a stable life for their dc, they don't want to risk being homeless and their dc having to find new schools etc.
I think its down to the individuals themselves, not if they receive benefit or not.

[Dromedary]

Horrible that the big landlord in Kent who was on radio 4 is simply getting rid of all tenants on benefits, because he thinks that on average they are less reliable. Bad enough to refuse to offer them housing, but to throw them out, even if they have always paid on time! And he was of course very supportive of the government reducing housing benefit. I thought the point of housing benefit was to enable people to rent accommodation? If it is not enough for that, or if landlords will not rent to them, then what are they supposed to do?