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!

Forcibly getting tenants outs is increbily expensive. Landlord insurances mean you can't take on new tenants on housing benefit, HOWEVER there is no reason to evict tenants who have fallen on hard times, unless they are in rent arrears.

I just hope there is such thing as karma!

backonlybriefly the council paid the rent directly in my brothers case, not to his tenants go pay to him.

Onesleeptillwembley as I said I don't disbelieve it. I just don't understand how the council can get away with taking money from the LL.

Even when paid direct the LL has no way to work out what the tenant is or isn't entitled to. It makes as much sense to take back money from Tesco that a claimant spent there.

Maybe it's just that most landlords couldn't afford to go to court to challenge it.

btw that advice about refusing to move without being evicted used to be given to everyone, not just claimants. The point being that homeless people had to prove they had done everything possible to avoid being homeless if they wanted any help. If they acted reasonably and moved out when asked they would be penalised for it.

Any rule that was probably made without thinking it through. It's what governments do best.

While I get that some landlords cannot take on HB tenants due to insurance etc, you've got to wonder what is being done to help those who have no choice but to be on HB? it's not like there is a huge excess of social housing for them, so where do they go?

BackOnlyBriefly - information about reclaiming benefits tends to be on each council's web pages. I can't find a UK wide site.

I have an Inherit-to-let flat. Basically I'm stuck being a landlord because I inherited part of a property and I can't sell it. The flat above has been on the market for over 4 years with no offers on it. We've had good tenants and bad. The worst were a pair of brothers who had dodgy references. They were in and out of work, which meant we hardly ever got rent. Benefits were paid (to them) 4 weekly but the rent was due monthly and it took us ages to evict them - not being helped by the letting agent being a bit crap and serving the notice incorrectly the first time so we had court costs and bailiff costs. If they'd been good tenants then we'd have kept them but they…

1. had fights, resulting in over 20 call-outs to the police by neighbours.
2. dumped rubbish over the fences
3. trashed the furniture and carpets
4. spray painted graffiti on the walls
5. left a load of their stuff behind when they finally left which took several skips to get rid of
6. smoked in the property (against the rules for the building)
7. had a dog which they never cleaned up after

They caused about 20k worth of damage on a property that probably isn't worth 100k, not to mention all the stress for their elderly neighbours.

I could have tried to claim money back of them but what sort of chance would I have?

There's no mortgage on the property so technically I could have HB tenants (and would consider keeping tenants who were in work but subsequently lost their jobs) but since tax records can go back years, what incentive do I have to take on HB tenants when I could be forced to pay 6 years worth of their rent to the council while they live rent free?

It's not new. When DH became disabled in the late 90s, we had to look for a house that would take housing benefit. I had a paper (remember when all the houses were in the local paper!) with a full page of lettings. I scribbled out every one that said NO DSS, and there was a single property remaining. I remember showing the page to my dad in utter shock (was rather naive).

Anyway, we rented that sole option and it was an absolute deathtrap. God, what a dump that place was! But what could we do? We had to be near his hospital at the time.

I've just looked out of interest at moving back where I grew up, on HB. The cheapest 3 bed flat is £2200 a month, giving a shortfall of £800 a month on the Local Housing Allowance. This is impossible to achieve on one income and even on two average incomes it's pushing it and that's for the tiniest proportioned flat. Ironically it (and all the other lowest price flats) are ex-local authority. London will become deserted over time as nobody can actually afford to live there whether they are working or not. Employers will have to move out unless they pay higher wages to the low paid.

No wonder Boris was annoyed when the government brought in the LHA, it really is verging on ethnic cleansing if by ethnic he means 'poor'.

"London will become deserted over time as nobody can actually afford to live there whether they are working or not."

This is the effect of the LHA and the benefits cap. Thousands of families have already been moved on - IIRC Camden Council alone sent 900 families North, where they likely had no ties or family support.

It won't be deserted though, it will be a city for the rich.

It really depends doesn't it not a word? On the area and type of tenants. Obviously you are aware that the tenancy checks you describe are not universally applied to all tenants - it's entirely up to the landlord.

And no, I wouldn't provide bank statements and neither would I accept them. Having money is one thing. What a landlord wants is a tenant who will CHOOSE to spend that money on rent, on time, each month.

I have rented to tenants who earn well into 6 figures and have not paid on time. Making that transfer is a choice, and you want someone dependable who will choose to do it.

So does this mean even if you can accept hb tenants as you have no mortgage, you have to refuse because you won't get LL insurance?

Serenity, well exactly. A bank statement shows you that a tenant has chosen to pay rent to a landlord. If you had asked for bank statements, you would've probably seen that the tenants earning into 6 figures were spending more than they were earning each month and would have avoided that risk.

to the person who thinks it is ok not to tell a landlord that you are on HB - should you get defrauded, or even burgled, I hope you will keep that big grin and just say 'well, that's business'.

So does this mean even if you can accept hb tenants as you have no mortgage, you have to refuse because you won't get LL insurance?

Don't know why my laptop decided to post twice, but a vey interesting topic.

exWifebeginsat40, sorry that you've had a shit time of it today. Hope you can find something soon. It's a horrible position to be in and I feel for you.

You say your ex-h has some money - is there any way he could stump up six months' rent for you? You could always pay him back as your hb comes in. It would put you in a much better position if you could pay the term of the assured shorthold all in a oner, and people listen to money.

While I get that some landlords cannot take on HB tenants due to insurance etc, you've got to wonder what is being done to help those who have no choice but to be on HB? it's not like there is a huge excess of social housing for them, so where do they go?

Well, in the US, I believe churches and charities are running tented camps for homeless families. Kind of like refugee camps, but for the poor.........Watch this space

Cokefan, you say "what incentive do I have to take on HB tenants when I could be forced to pay 6 years worth of their rent to the council while they live rent free?"

Well none and I wouldn't blame you for avoiding HB tenants, but I'm the one saying the council ought not to be able to do that to you. They have no moral right to take the money from you if the tenants cheated to get it and I still don't see how they can have a legal right. Aside from "we are the council we can do what we like". It's a situation that needs looking into.

I also don't blame those who can't let to HB tenants (even working ones) because of insurance rules. However I'm a little disturbed that the government are ok with insurance companies having this effect.

Insurance companies just look at the way to make the most profit with least risk. It's not their job to sort out moral dilemmas. But if I were an insurance company I might find that statistically speaking, at this moment in time, white people were a safer bet than black people. If they tried to make that a rule we'd do something about it wouldn't we.

I don't understand why councils are involved in housing benefit at all. If it's a benefit it should be up to the benefit office to sort out? It's probably something historical but it's not working very well.

BackOnlyBriefly - unfortunately if the tenant has left and not given a forwarding address then the landlord is an easy target. They know where you are and they know you've got an asset they can chase you for. From their point of view I suppose they're retrieving money for the public.

Actually there can be positives to renting to people on benefits. Despite previous experiences I've currently got someone who is on benefits as a tenant and she's lovely - really looking after the property, getting on with the neighbours and seems to see it as her family home long term (hopefully). The rent is actually paid by her guarantor so I'm not at risk from money being clawed back.

Insurance companies probably do use statistics on "white" versus "black" or whatever risk but just not overtly. They charge different premiums based on postcode. It was a long time ago now but my parents' house postcode changed and their house insurance premiums went down overnight for no other reason than this.

Yep, if you can find a reliable tenant on benefits then it's someone you will want to keep. I'd rather lower my rent a little for the safety and security of having the reliable tenant.

But unfortunately there's no denying that renting to those on benefits is statistically more risky. That's why mortgage and insurance companies often place restrictions. And that's also the main reason why LL's prefer not to.

It's absolutely nothing to do with keeping the downtrodden down. Business is business. All a landlord wants is a reliable tenant who doesn't trash the place and pays on time. Suggestions that this is somehow wrong is frankly perverse.

I agree with Niceguy. Surely we need to target the benefit claimants who spoil it for the rest of them and make it completely unacceptable for them to trash the house, spend the rent money on other things and make the lives of their neighbours hell.

We should stop saying these people have no choice due to their backgrounds. There is a choice for all of us in life. Trashing your house and making others around you have to put up with it is your choice. You arent being forced to do it!

Who is 'saying these people have no choice due to their backgrounds'? I have never seen anyone saying this. Is it the voices in your head?

There are many many threads on Mumsnet saying that people who live like this are because they have been brought up to think this is normal life. Having children with no visible means of support, who rage at the council for not giving them enough money to support their 'lifestyle choices'.

Who cannot be bothered to even clean up the own street they live in

I actually think a lot of the landlord/tenant exist because there is no sense of collaboration between the two. Most sensible people on this thread have said that it doesn't matter where the tenant gets their money from as long as they are respectful and pay on time. I'm sorry but people don't just trash their own home for fun (occasional loons do but they are probably junkies or alcoholics). In Europe where renting is the norm, people invest in their rented homes by keeping them nice and clean and landlords keep rents affordable in order to keep their tenants. People rent for 10 years plus, have long tenancy agreements and it works well.

However in London things have got completely out of hand. The only people that can afford to live there now are those that can cope with living in a tiny space, usually shared with others. Students or migrants with a real home elsewhere.