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

Universal Credit replaces Housing benefit with the housing costs element being paid to tenant. As much as it is a disaster, it was done this way to partly level the playing field as it is an in and out of work benefit... when housing benefit is completely revoked, how will people be judged then ?

I am not missing the point at all :
I just disagree with you

We don't have unfettered capitalism:
The state passes laws on what businesses can do and most of these laws add to the expenses and risks that businesses have
We elect MPs to pass such laws, because these measures are judged to be in the public interest

Few people want to roll back e.g. maternity rights, which businesses are forced to grant to women and which cost them

I'm just suggesting that better access to housing for 4.5 million people is another case where it is in the public interest to restrict what businesses can do

It would already be illegal for banks to refuse to lend to LLs specifically for having disabled / women / ethnic minority / elderly tenants

The main responsibilities they have include obeying the law.
I want to add to the protected categories against which larger businesses cannot discriminate

Actually most BTL mortgages do allow you to rent to someone on HB.

It sounds like this LL got a residential mortgage (mortgage for their own house) then moved away so rented it out with consent from their mortgage company. Part of most consent to let is no HB as well as a lot of other restrictions not on a BTL account like only being allowed to rent for a specific length of time, no HMO or changes to the property. If someone wants to do anything more then they have to remortgage for a BTL mortgage.

Its a very very dangerous road going down statistics for everything.

For example statistically black people commit more crimes should they be classed as "higher risk" simply because they are more likely to be convicted criminals?

(statistically it is true black people are over represented in the prison population then there total % of population should mean but thats most likely down to other issues rather then black people being more likely to commit crimes).

Before anyone calls me out for being rasicst i am just pointing out that using purely statistics is a dangerous game not that i feel black people are more likely to be criminals.

It is a fact poor people are more likely to be criminals then rich people or people dependant on drugs, fags or booze if they cannot legally fund there habit they are more likely to go down the route of criminal behaviour then someone middle class or higher that has the income to fund there habit.

So should we discimitate agaisnt poor people because they too are more likely to be criminals so not giving them a job because they are more likely going to rob you etc.

Landlord or morgage companies SHOULD NOT BE ABLE TO DISCRIMINATE AGAINST ANYONE. While i do not like a lot of American laws most states ban landlords (and thus loan companies) from not renting to people receiving state handouts / there version of benefits and or any other reason (the wording varies state to state but thats broadly the jist of it).

I agree WorridMum and it is certainly not racist to point out those statistics

We have laws to prevent firms using perfectly genuine statistics to discriminate against all people of colour,
but of course they can choose not to do business with any individual , whatever colour, who actually has a criminal record or a default

Poor people are statistically more likely to commit some types of crime, because they don't have enough money for much more than the bare necessities, if that

• but also rich people are more likely to commit frauds and tax evasion involving large sums of money

There are different opportunities and motivations for some of the crimes committed by different income levels

So the banks should be forced to lend to higher risk clients?

Lending too much to high risk clients was what the big bad evil banks did prior to the financial crash, necessitating the much maligned bail outs.

Terrible idea. People with that logic are probably the same people that go on anti austerity marches without a hint of irony.

Pure greed caused the “crash” that actually didn’t happen.

You're right, banks didn't fill their boots on sub-prime out of the goodness of their hearts. But whether it's done for the right reasons or not, risk is risk. And not a mistake I'm keen to see repeated, albeit via a third party in the BTL sector.

You're right, banks didn't fill their boots on sub-prime out of the goodness of their hearts.

They did it because they could hide the bad debts in amongst the good ones long enough to be in St. Tropez before the rest of the world realised.

They did it because they could hide the bad debts in amongst the good ones long enough to be in St. Tropez before the rest of the world realised.

It still isn't just the banks fault, people were taking out 120% mortgages, personal debt levels went up.

During the bubble the averege joe thought house prices would keep on going up forever and and banks thought the CDS/CDo's would not unravel, it would have come tumbling down eventually either way at some point, it just happened to be the banks first.

No body was holding a gun to clients heads forcing them to take 100+ % mortgages out, the world had eradicated boom and bust remember.

I don't disagree that banks behaved badly. . But is still don't see why banks should be compelled to lend to people that are of high risk of defaulting, because, well, some banks made some money out of it in the past before it all went pop.

They are NOT lending to people at high risk of defaulting
they are lending to LLs who have tenants with statistically higher rates of not paying their rent.

Most LLs would be very cautious anyway about accepting a tenant on benefits, or with pets or kids
This LL knew the tenant, who has already payed on time every month for 2 years

Let the LL use their judgement to decide the individual case, since they are responsible for the debt
They could get a bad vibe about a tenant with a good job, or find a tenant on HB to be trustworthy

My only really bad experience as an LL was with a high-flyer who lost his job just as he was moving in - and didn't tell me.
I had a bad impression somehow of his faffing around at the start, but his references were brilliant, so the agents recommended him.

I had to pursue him fo 3 years before I finally got all the rent arrears back
Fortunately, I had no mortgage and had legal insurance

I would be totally against a law compelling LLs to accept HB tenants,
but I want a law to prevent banks telling LLs they can't rent to any of the 4.5 million people / families on HB

That is a blanket ban
Risk is individual
The LL should be allowed to consider the individual, not lump 4.5 million together as unsafe.

This is an example of where society needs to restrain capital, just as it does wrt maternity rights etc
4.5 million is far too large a % of the population to exclude

This is an example of where society needs to restrain capital, just as it does wrt maternity rights etc

If you believe in society ...

It's a lending policy. It is no different to banks saying they won't give someone a credit card unless they meet certain lending criteria.

Banks are a business, not a charity effort.

but this is one stage removed:
the LL passes the criteria

and should be allowed to judge the risk of HB tenants to their own mortgage

• in practice, most LLs would refuse anyway, just as they would refuse those with pets

However, the banks can't judge the individual tenant and the LL can
As every statistician should know, population studies work on populations, but cannot predict an individual case

I would be totally against a law compelling LLs to accept HB tenants,
but I want a law to prevent banks telling LLs they can't rent to any of the 4.5 million people / families on HB

And then interest rates will go up for the rest of us.

I don't think there needs to be a change in the law, I think there needs to be a test case on the grounds of discrimination.

People with disabilities are far more likely to be on benefits than people without disabilities, so a blanket ban on tenants on benefits is indirect disability discrimination. Some organisation (possibly Shelter, but it might have been CPAG) started a sex discrimination case with a single parent on benefits (90% of single parents are women, hence sex discrimination), but the letting agent/LL settled out of court, so there's no legal precedent. Yet.

It is almost impossible round my way to find LLs who will take tenants on benefits. Even when the LL is willing, it is often a condition of their insurance or BTL mortgage that they don't take tenants on benefits. It has got much harder over the last 10 years, too. Imo, it's one of the reasons that there is more homelessness these days, one of the reasons I'm burned out, and one of the reasons I'm changing jobs.

Some public-spirited landlords are prepared to pay extra premiums so that they can accept people on benefits, and we could provide them with an endless supply of tenants.

When a nurse on £26k can't get a home for herself and her kids, because she needs HB to top up her rent, something has to change.

What would help, imo, is if HB was paid directly to LLs

The council in the area where I work will happily do this, providing that it is a condition of the tenancy. It's one of the ways we persuade landlords to accept tenants on HB.

I've never bothered to check if this is in HB regs or if it's just the local council being pragmatic. If it's in the regs, all councils should do it.

there also ought to be a way that housing benefit can be paid ... a month in advanc

That would require a revision to HB regulations. I think councils would object, because of the risk of overpayment if a tenant had abandoned the property (or died!).

No-one's going to bother with revising HB regs when most working-age tenants will be on Universal Credit eventually.

No-one's going to bother with revising HB regs when most working-age tenants will be on Universal Credit eventually.

Or no housing benefit.