to think my friend is a benefits cheat

[ljwales]

She has several buy to let properties that are all occupied by people in receipt of housing benefit.she regularly monitors the market and if the housing benefit will ever pay any more money for the properties she puts up the rent as she knows the tax payers will pay the increase. She's done this several times over the last few years, even though her costs have fallen massively with the interest rate drops!

Yes it is a flaw with HB and the lack of social housing and with the housing market in general.

Red row are building houses near me. Quite small houses, small gardens. They are Charging 70k more than a similar house, with a big garden on the same road. This is now driving up house prices in that area. I know 2 couples trying to buy them and can't get a mortgage because no company will agree they are worth that much. Their deposits (if they go ahead) will be taken up with paying the shortfall between the mortgage and what the builders want. This doesn't sit right with me either. Its artificially inflating prices.

What is legal is not always morally right. I am not saying she is doing anything illegal, but I think its immoral. Its damaging every person in the country. You don't have to do something just because its legal to do so.

Surely its the same thinking with mps expenses and tax evasion.

I'm not sure it's ethical to buy up housing stock you don't need for yourself in order to make a profit, but that's the world we live in. Personally I feel OP's friend/of a friend's behaviour is more immoral than somebody on benefits taking say a few hours' one-off cash-in-hand work to pay for something their benefits won't stretch to, but the law isn't based on relative ethics.

I don't think your concern is unreasonable at all.
Of course she'll rent to housing benefit recipients. They are the best kind of tenant for a 'landlord' such as herself.
Guaranteed money to feather her own nest.
I'll bet her places are in a mess, and poorly maintained.
As she isn't a direct friend, l would forget about her.
Unfortunately she isn't in the minority.

I don't see the problem - would you rather people were homeless? If she is charging what is allowed by the housing benefits rates and not over, then its allowed by the government to charge that much. If she were over-charging, then I would see your point.

And some tenants on housing benefit can struggle to get accommodation, because rightly or wrongly they are perceived as higher risk. There is a cost to that as I guess the risk in getting a bad tenant is possibly higher. There may be more costs in monitoring the condition of the properties (not all HB tenants are saints), or a higher rate of breakages, or more cleaning up on moving out.

You sound jealous that she has business skills and you don't.

I have a small rented house. I've never been in a situation where Housing Benefit was more than I could get in rent from a non-HB tenant. It's always a bit under the general going market rent rate.
I think what she's doing is fine. At least she's prepared to rent to people on HB, which can be a risky business in itself (not covered under most rent-guarantee insurance policies).

I don't think op sounds "jealous"
She obviously has morals.

Landlords that 'relish' in housing benefit recipients, are a little different from those that merely accept it

pitsimple0

Funny how those receiving Housing benefit are vilified, but those who actually end up with it in their pockets are praised.....

Great post!

Wow just wow at all the people saying good on the slum landlord milking the tax payer for every penny she can. A business woman maybe, but someone with low morals and ethics. Lol at jealhap! And I used to like you chalnder.

You seem to know an awful lot about the business of this friend of a friend Op, including the fact that her properties are dilapidated and the tenants put up with that because they are on HB. (Not my experience, HB tenants have always been as keen as any other tenant to get things fixed. Their rights are no different to anyone else's).

Her properties are leasehold so she could get a "large bill in"? Do you know what leasehold means and how ground rent is paid?
You don't get involved, but have a massive amount if information that we do not.
So obviously Op, YANBU.

Yes I know what she's said and repeated it here.

What do you mean about leasehold and ground rent? Makes no sense.

No LL is obliged to set their rents with reference to LHA levels. Or to frequently check LHA levels so as not to miss out.

so you are saying a business person shouldn't use easily available public data to help her set prices?

What is legal is not always morally right. I am not saying she is doing anything illegal, but I think its immoral. Its damaging every person in the country. You don't have to do something just because its legal to do so.

Of course there is a distinction between legal and moral. What i don't get is why it's the responsibility of this landlord to give "fair rent". it's not. Like absolutely every other landlord, she is trying to get the most for her place. It doesn't sound like she is being individually mean to people. She is using public information to set prices.

I hear a lot of people assert she is immoral, without giving any reason. As far as I can see, what she is doing makes complete sense.

my former landlord did this he had his properties assessed by the fair rents officer and charged the maximum he could for the properties however if you got a job he would drop it to what he thought he should be charging he absolutely worked the system to his advantage but he dropped it if you worked because he didn't want to take advantage of people he also was very generous and kind so is his widow when my dad lost his job and housing benefits were taking the piss awhile to sort out she asked for nothing he owed over 6 months in the end she did get a bit twitchy at that but she got her money in the end

Local rents set LHA rates. A landlord would be foolish to charge less than the 'going rate'. Just as a market seller would be foolish to sell tomatoes at £1 per crate if everyone else was selling at £1 per punnet.

Are you jealous?

But seriously, I think YABU but I understand why. It doesn't seem like a very moral thing to do, basically exploiting the tax payer, pushing up prices and preventing others from getting on the ladder.

However that is the situation with the housing market in this country at the moment - it is run for the profit of a minority that can afford to buy to let. House prices are too high so average people have no hope of buying in many areas of the country and social housing, especially council owned, is very limited.

It would be a lot better if the council could buy/build properties and then at least the money would be invested in a state asset.

Still shocked at the amount of people that are happy to see the tax payer ripped off and the rental market distorted for someone's personal gain.

When its Starbucks using legal methods to avoid tax that's not OK, but if an individual does something to maximise their profits then that's just fine for many here

There lot of BTL LLs on MN.

Personally I'm still chuckling at the notion that you've described someone with impressive 'business skills'

It's Exploitative and wrong.
Sadly, not illegal.

Environmental health won't deal with dodgy double glazing, some mould, dripping taps, worn out carpets, or even bedbugs.

Be good to see tighter regs. More rights for tenants.

I think if the state has paid the mortgage, the property belongs to the state. How bizarre that it doesn't!

I hear a lot of people assert she is immoral, without giving any reason. As far as I can see, what she is doing makes complete sense

With that logic, mps expenses were fine as well then.

Its immoral because of the negative impact it has on the country.

It's buy to let that's the problem, not specifically LHA landlords. People buying huge btl portfolios raise prices and push out potential owner occupiers, then push up rents to the maximum they can. LHA landlords are no different, difference is they rent to low income families.
Most LHA tenants work - and most of their landlords will have no idea that they claim. Landlords profit from tax payers full stop - because rents are too high for many people to pay! Where's the problem there?

Absolutely agree with bath time funkster.

Couldn't be friends with someone as grubby as this.

of course she's not a benefit cheat, in what way do you think that?

I wouldn't say it's morally dubious either, she's just trying to make a living by maximising her profit from her small business.

i also seriously doubt her "over the last few years,......her costs have fallen massively with the interest rate drops!"

Mintyy Grubby? Well I wouldn't want to be friends with someone as judgemental as you.

This person is trying to make a living for herself and (probably) her family. All small business owners will try to maximise profit, it's common sense!

She has a few BTL properties, so I'm sure it's safe to say she pays tax on her earnings.

What about people that don't work and claim benefits, are they "grubby" as well?

As l said before.
It speaks volumes about a landlord that prefers housing benefit recipients.

They are milking a system that is already abused/run dry.

I am surprised that renters should be' all so very' grateful that she acceptshousing allowance.

Taxpayers aren't being ripped off by this landlord, they are paying for people who can't afford it alone to have somewhere to live. I'm quite happy for my taxes to contribute towards that, everyone needs a home.

I can't see his this situation would be any better if the ll in question did up her properties and charged market rate instead of LHA rate, that would just mean fewer properties available for those on HB.

Anything that only benefits a few people and costs a lot of state money could be said to have a negative impact on the country.

At least this woman is doing something to provide for herself and her retirement, which isn't something that can be said for everyone who benefits from the taxpayer.