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

Change the tenant does mean evict
How is she supposed to get another tenant other than by first removing the current one ?

She was - apparently unknowingly - in breach of her lending conditions by lending to someone on HB

• the bank mislaid some information and didn't spot this until the LL asked to extend mortgage

So still the same cause of the problem:
the bank refuses to lend to LLs who have tenants on HB

Without btl, prices would fall and far more people could afford to buy

If btl LLs own an ever increasing % of the rental properties, then it becomes more important to make sure that whol sections of the public are not excluded.

Otherwise 4.5 million people are chasing an ever smaller number of properties to rent

I can't find any evidence to suggest that benefits claimants are "objectively" risky tenants. Can anyone source this?

It's deeply offensive to imply that people who have /are able to work are better or more moral people than those who don't / can't.

To the people saying that the problem is BTL: this landlord was not a conventional BTL landlord owning multiple homes, she was temporarily working elsewhere and hence renting near her work and letting her own home out. I can’t see how forced to leave your house empty or sell it in those circumstances would help anyone.

This is a case where there is a strong commercial incentive for the banks/insurers to discriminate, and only legislation will prevent them. A change in the council’s rules that force tenants to stay in place until eviction rather than going on request would also help.

The issue with benefits is they can be stopped without any notice. If your tenant works they get notice they are being fired and are paid what’s owed still and fall onto benefits. Those on benefits have nothing to fall back on or notice given so it’s riskier. Just like those in work find it easier to get a new job than those not working. It why landlords also ask for employers details and previous landlord they check that you are not know for being fired/jacking in your job once your in the property. An employee with years in one company is safer than an employee still on their probation period or working via an agency.

If someone loses their job, they may have no savings to tide them over.

Going on benefits takes time - 6 weeks+ in the case of UC, months sometimes if one document is late / wrong

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?

That's not how the free market works ... if fewer houses are being bought to let then it stands to reason more will be bought to live in. Thus reducing the number of people needing to rent, and thus the pressure on rents.

That said, all of this is tinkering around the edges, and avoiding the elephant in the room, that there simply aren't enough houses to go around. And no amount of anything other than building houses is going to ease the situation for the upcoming generations. We'll have to wait until the demographics of renters is such that they elect politicians who will make the necessary changes in law to protect them, and make renting a less exciting experience.

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

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

That means you're saying that it's ok for landlords to discriminate, but not banks, right? That makes no sense.

It's not discrimination anyway, people aren't being denied tenancies simply because they're on HB, they are being denied tenancies because they can't afford to pay the rent by themselves.

If banks took too many big risks with lending money, and those risks didn't pay off, it would have a negative effect on everyone, not just tenants. Banks are not responsible for providing people with homes, individuals, councils and governments are. It's them that need to change, not banks.

What would help, imo, is if HB was paid directly to LLs
yes, I know some tenants want the freedom to prioritise other things over rent, but this would help the majority to rent

Also, I think the HB part of benefits should not be treated separately and not stopped whenever there is an allegation that someone is falsely claiming benefits, or if they missed an appointment

There are so many cases of false allegations, or people missing appointments because of job interviews, hospital etc
At least leave claimants with a roof over their heads.

When HB was paid directly to landlords, it was they that were made to pay it back if the claimant turned out to have committed fraud or be ineligible.

If that were changed, and the claimant was responsible for what they claimed instead of the landlords being responsible for tenants claims, I'd agree with you.

It wouldn't solve the problem when tenants have to pay more for their rent than they receive in housing benefit though.

^What would help, imo, is if HB was paid directly to LLs
yes, I know some tenants want the freedom to prioritise other things over rent, but this would help the majority to rent^

Er, surely HB should be exactly equal to the rent ? (Which itself needs to be within bounds, otherwise we can see where this will end).

Alternatively, we make it impossible/illegal to know if a person is in receipt of housing benefit - the same way it's illegal to ask someones sexuality, age or disability ? (It's already arguable that being in receipt of HB is more likely if you are disabled, so it's suggesting indirect discrimination anyway).

Or, I guess we could go the other way, as a society, and just stop giving a shit about other peoples problems ?

Banks are large institutions, lending for millions of properties, who should not be allowed to write off a large section of the population, 4.5 million on HB

It is different for an individual LL to be picky about their tenants.
An LL - if they are not one of those owning hundreds of properties - can look at the individual, as well as consider their own circumstances and preferences.

They may then choose someone on HB or not, same for people with kids or pets
The property belongs to the LL, together with the responsibility for paying the mortgage.
So they should decide, not be forced by the bank to exclude people on HB

I posted the question upthread about whether anyone thinks banks should be allowed to discriminate against the disabled and ethnic minorities, if statistics show they are more likely to default.

" If that were changed, and the claimant was responsible for what they claimed instead of the landlords being responsible for tenants claims, I'd agree with you."

Yes, that's only fair.

To make it illegal/impossible to know agents/landlords wouldn’t be able to ask a persons income, apply for a £800 a month house on 12k salary it’s going to be deadly obvious someone other than the tenant is paying. If landlords/agents can’t ask for proof of income they will want the whole tenancy upfront to prove it can be paid.

You seem to be missing the point entirely.

Why should banks be forced to lend money on a business proposal that involves too high a risk?

They are not the ones responsible for the statistics that show HB claimants are more likely to default on rent, cause damage, or need court proceedings to leave a property when they're supposed to.

To make it illegal/impossible to know agents/landlords wouldn’t be able to ask a persons income, apply for a £800 a month house on 12k salary it’s going to be deadly obvious someone other than the tenant is paying.

Well when a tenant turns up, there gender, age and ethnic origins are clearly on display too ....

Why should banks be forced to lend money on a business proposal that involves too high a risk?

Or allowed to lend to people buying to let ?

nails has a fair point. Car insurance do the same to higher risk groups they either well over price the product making it unaffordable or refuse to insure full stop. Banks are doing the same they refuse or make the LL pay higher insurance for the renting to HB tenants. Until the mortgage is paid off in full the bank still own the house really and can take it back anytime.

Why are (larger) firms not allowed to discriminate against hiring women of child-bearing age, or with children,
Or pay them less than men ?

The state chose to pass laws outlawing such discrimination and over-riding the commercial interests

Statistically / commercially, where there is no shortage of applications, these anti-discrimination laws overall cost firms money.

That is why some politicians, e.g. the Britannia Unchained group, are eager to roll back the clock, have a "bonfire of regulations" and remove such legislation

There is always a balance between public interest and commercial profit
imo, excluding 4.5 million people from a significant chunk of the rental marker is unfair and we need lawes to prevent financial institutions doing this

No, it shouldn't be applied to individual LLs, for the same reason some laws don't apply to small businesses:
one bad case and they could go broke

there also ought to be a way that housing benefit can be paid directly to the LL and a month in advanc. Especially if the tenant is several months behind with their rent. I know in principle that direct payment is the case now, but when i tried to get this done the current process is unworkable. Tenant has to be several months late, then guidelines say the DWP can take about a month to respond ( and didnt), with persistent chasing from me they eventually said i had completed out of date form (wasnt when we started) and then when i submitted new form we went back into the queue again for another month waiting a response.

there also ought to be a way that housing benefit can be paid directly to the LL and a month in advance.

Like it used to ...

OP you seem to think banks have a responsibility for HB tenants, the disabled etc. They don't. If you stop looking at it this way.

I'm on HB not because I don't want to work, I'm disabled & have a disabled child. The stupid thing is I could afford to pay full rent now, I'm getting enough money, more than I did when I was working. When I first got my council house I was still getting full pay from work + tax credits, CB & DLA for me, I had to pay half rent, the rest was made up with HB, I paid full council tax as I didn't qualify for any help with that. After paying my rent, council tax & utilities I only had £50 A week to feed & clothe myself & my son. Now I've got more money than I've ever had & get almost all my rent & council tax paid for me. I know it's because of the benefits I qualify for but it doesn't feel right that I had to struggle just because I was working. Housing benefit should be calculated on What you have coming in, not just because you have in effect ticked a box by getting a certain benefit. I'm way in front with my rent but could never get a private rent because most private LL won't touch anyone on benefits, I looked for one when I was in my first council house because we were in an awful situation of living on a really rough estate, suffering horrific anti social behaviour from nightmare neighbours, we got assaulted, threatened, were afraid to go out & spent 3 years living as prisoners behind closed curtains, got no help from the police who advised us not to press charges when my partner was dragged out of the house & badly beaten in front of my then 6 year old son as "it would probably make things worse for us & the neighbours would retaliate" the council were useless, wouldn't support us to get moved, they told me I was lucky to have a council house & would have to wait 10-15 years to get moved. I would love a private rent in the area where I lived most of my life, I can afford the rent, but would lose the security for having a lifetime tenancy as I do now. Thankfully I managed to get someone who wanted to live on the nightmare estate ( it's the type of place where you are only accepted by the locals if you have lived on there all your life & have family living there, they don't like outsiders or anyone who wants a better life than they do) I still live on a council estate only 5 minutes away but it feels like a million miles away, the people are nice & caring, there are troublesome tenants but they keep themselves to themselves & don't bother everyone else.