To think banks shouldn't require LL to evict tenants, solely for being on housing benefit

[BigChocFrenzy]

The LL is solely responsible for paying their mortgage.

So, if the LL chooses a tenant on housing benefit, or lets an existing tenant stay, that should be the LL's decision, not the bank's.

https://www.theguardian.com/money/2018/oct/20/natwest-is-it-right-to-evict-a-woman-on-housing-benefit

'The tenant, a vulnerable woman, has for more than two years always paid the £400-a-month rent on time.
....
[NatWest] ..."in its correspondence with Helena that
“the options available to you are to seek an alternative tenant or move your mortgage to another lender”
....
^Helena [the LL], to her great credit, has done the right thing:
she has refused to throw out her tenant and told NatWest to get lost, taking out a mortgage with a subsidiary of Lloyds instead.'^

She has also organised a petition:

"Call on the government to stop banks discriminating against welfare recipients"
https://petition.parliament.uk/petitions/230012

According to MortgagesforBusiness.co.uk, as many as 20 lenders ban tenants on benefits.

However, there are 4.5 million people on housing benefit
That's a significant part of the population to exclude

No, that isn't what happened and is misleading. There has already been a thread on this. The LL asked the bank for more money!

I understand why lenders and insurers may do it - they believe, possibly supported by statistics, that tenants on HB are more likely to damage the property or lead to unpaid mortgages.

And that's why it needs to be outlawed. Stastical likelihood does not justify discrimination against individuals, that's why we have anti-discrimination laws.

Whether it is a new mortgage, remortgage or extending the mortgage,
the banks should not be allowed to force LLs to discriminate against people on benefits

If we want housing benefit tenants to be treated better by mortgage lenders, then we need councils to change their ridiculous policies of forcing tenants to stay in a property that they can't pay for until they are evicted by bailiffs. I can end up costing landlords thousands to evict tenants, who may well want to leave, but can't because the council won't help them until the landlord has been forced to pay for an eviction process.

Councils have a responsibility towards everyone, banks only have a responsibility towards their customers.

Ultimately, if HB receipients weren't so risky statistically, there wouldn't be this problem.

I know the "reason" was to encourage tenants to budget. But if HB was paid direct to the landlord, I'm sure a lot of banks would relax their requirements.

Alternatively, scrap BTL mortgages - then it's nothing to do with the banks.

It's about risk. If a LL is waiting for the rent to pay the mortgage the bank will want asses the risk. As a LL years ago I was also not allowed to rent to students or as a multi occupancy home.

Shame on you, NatWest
Dreadful that the bank demanded the LL evict a vulnerable woman, who has always paid her rent on time

Currently, the 4.5 million people on benefits can be excluded from an important part of normal life: private renting where there is a mortgage.

That level of exclusion makes life even more difficult for those affected

The LL should be allowed to use their judgement, since they are the ones liable for the morgage.

Some LLs will refuse to consider anyone on benefits,
but some - like in this case - consider the individual case, especially if they know the tenant

The day I came off benefits entirely I did a dance around the kitchen, more trouble than they are worth dictating where you could live, terrified they’d suddenly stop for no apparent reason, banks hate them, landlords hate them but those reliant on them hate them the most. It’s no way to live

Yup, benefits are not something to aspire to
but those still on them shouldn't face yet more problems:
housing is a very basic need

LL calling on government to call out private transaction between her and her bank, whilst also letting the government pay her mortgage.

This is why the housing market is broken no.312345

Objectively, it is very risky to rent to tenants on benefits, which is why banks may refuse to allow buy to let landlords to have them as tenants. Banks are just protecting their interests

Objectively, it is very risky to rent to tenants on benefits, which is why banks may refuse to allow buy to let landlords to have them as tenants. Banks are just protecting their interests

Maybe we should be questioning the fact that there is even such a thing as a "buy to let mortgage" ?

dgrosseti what would you propose instead? Many people do not wish to, or are not able to buy their own homes. Landlords are therefore a necessity.

DGRossetti - if that were the case then tenants would be evicted once their contracts were up for renewal, the courts would be even more clogged up than they already are, and there would be a glut of properties coming onto the market. House prices would take a dive, and anyone who had bought in the last x number of years would be in negative equity. Having had a house thats worth 25% less than i paid for it, i can confirm this is no fun.

many evicted tenants wouldnt have deposits to take advantage of this price drop and would have nowhere to live

dreamingofsun - and that’s where 100% mortgages would save the day, that’s how I and most other 45-48 year olds I know got on the ladder back in the day

I think there should be some sort of credit check they can do to prove if you are a good tenant or not. I'm on HB and privately rent but had to have my parents as guarantor. I've never missed a rent payment and my house is kept nice and I'm sure there are people not HB who miss rent and fuck people about as well as those who are.

It really irks me that because wages in this country arent enough to live off and trying to get a council house round here is next to impossible. Where the fuck do they want us to live? Especially those with no guatantor. It's like punishing those who are already at that bottom.

Banks (and insurance companies, which also specify no benefits in their terms for LL) are entitled to conduct their business on their terms and conditions though and impose higher interest rates for some.

Nor did the bank demand eviction. They wouldn't lend to the LL. It's the LL here that has dragged the tenant in to it. It's the LL that broke the terms of her deal with the bank. Nothing at all to do with the tenant. All LL.

Time to stop the drama-llama-ing here.

There is always a risk of a tenant defaulting, quite often due to circumstances beyond the tenant's control,
e.g. an unexpected large car repair bill, losing their job

If there were other classes of tenants excluded by banks as bad risks - say the disabled - would pp still think banks have the right to do so ?

What if the statistics show that more BAME tenants default than white ones ?

dgrosseti what would you propose instead?

Just that it should not be possible to let a property where a mortgage is still being paid.

Many people do not wish to, or are not able to buy their own homes. Landlords are therefore a necessity.

But being a landlord has stuff all to do with getting a mortgage on a property to let it. I'm not suggesting outlawing property rental. Just property-rental-with-a-mortgage.

On the basis that it's never going to happen, I don't feel too inclined to put the effort into figuring it out in detail. But there would need to be a period where people who did have BTL mortgages would transition. Maybe the bank could buy the property outright and take it from there ?

The bank said either evict her, or change to another bank

LLs do sometimes need to extend the mortgage, whether because the fixed conditions have run out, or for otehr reasons.

If there were other classes of tenants excluded by banks as bad risks - say the disabled - would pp still think banks have the right to do so ?

A regular trawl of these boards would show that's pretty much what happens. Quite a proportion of disabled people are forced onto housing benefit, and so find themselves struggling to rent. With the added fun of starting with a much smaller pool of properties to start with, due to accessibility problems. (Suggesting another law making it a requirement that properties offered for rental must meet certain accessibility criteria. Not that it would ever happen either.)

NatWest policy is not to lend to LLs with tenants on HB, whether new mortgages, or changing existing ones

The bank hadn't realised when they gave the original mortgage that the tenant was on HB, because some documents were mislaid

it was only when the LL wanted to extend the mortgage that the bank realised.

No, the bank did not say evict. Change of tenant. The LL was already in breach of her lending conditions.

But being a landlord has stuff all to do with getting a mortgage on a property to let it. I'm not suggesting outlawing property rental. Just property-rental-with-a-mortgage

So you are proposing that the only landlords are those who are able to be cash buyers? That would mean far fewer landlords, fewer rental properties, and in turn much higher rent. How would that help anyone?