Landlord query - housing benefit changes, impact?

[lottiegarbanzo]

Hi All,

Can anybody give me a quick summary of the likely impact of the change from current Housing Benefit arrangements to Universal Credit, for a private landlord over the next two years?

I'm considering taking a tenant receiving HB, which would cover more than 80% of the rent, who seems organised and together, is able to pay a deposit and has offered to cover rent upfront herself for the 6-8 weeks she thinks it will take for HB to kick in. She's receiving HB at the moment but I guess has to reapply for a new address.

That addresses my usual objections, which are inability to pay a deposit and payment in arrears. Even when the benefit kicks in, I would in effect be receiving payment in advance (as I would for a private tenant), as I'll have a month's rent of her own money 'in hand'.

She assures me her circumsances won't change (she works less then 16 hours). But, I'm aware that benefits are changing, that one difference is likely to be that payments go to the tenant, not direct to the landlord (it seems I could opt for either at the moment).

What else? Are there other implications I should be aware of? Are any of them likely to affect the assessment of what she receives?

I've been a landlord before for many years but always to private tenants.

Thanks.

I don't think benefits go direct to the landlord at present unless your tenant is 8 weeks in arrears, so no difference there.

be aware that if she is fraudulently claiming HB (and I am not for a moment saying this is the case!) that they can come after YOU for refund.

if your insurers are happy then I see no major problem. Best thing is to talk to her about your concerns and see what she is doing to address them. You can also speak to the council for advice.

Yes, the council may procide the answer - do they, rather than DWP administer HB?

My main remaining concern is that something will change with the way benefits are assessed and allocated, so that her income drops and she can no longer pay the rent.

Is anybody else renting to a tenant on HB, or receiving HB, who knows anything about the implications of the change to universal credit?

This is a big issue in the news, with major landlords throwing out tenants on HB, or saying they might, because recent changes (payment through tenants) and forthcoming ones (move to universal credit) are worrying them.

Threads on HB always generate a lot of stories and opinion. I was hoping a few of the people who post might know something?

will the national landlord association be able to help

I don't know the answer but I just wanted to say how nice you seem. Very often landlords don't see beyond the two words "housing benefit" (and yes, I am aware of the insurance issues). It's nice that you are looking at the whole picture.

I'm another one confused about how the change to Universal Credit will affect HB as it is, in the overwhelming majority of cases, paid direct to the tenant already. The main problems with having a tenant who receives HB is that the LA can be very slow processing the claim and can then suddenly stop it - more or less on a whim - while they "investigate" something. If the investigation comes to nought, then the tenant will receive the backdated rent to pay onto the LL but, while this is going on, cash flow could be a problem. The other frustration is that client confidentiality means the LA cannot pass you on any information about delays etc so you are left in the dark about what is going on if the tenant isn't very communicative. As I said, though, not sure how this is going to get better/worse with UC>

th other thing to consider is that universal credit is not due to roll out until 2015. not sure about the private sector, but certainly in the social rented sector there is a feeling that this is over optimistic - considering they can't even get their computr systems to work and I think they are retendering for this at the moment

Thanks all. I was hoping someone might know the answer so I wouldn't have to look things up for myself!

A cursory search gave me this handy summary: www.moneyadviceservice.org.uk/en/articles/universal-credit-an-introduction

I think, for someone like my prospective tenant, who understands the system and works an allowable number of self-employed hours - so could presumably extend them if the system changed to allow or require that - and gives the impression of being fairly financially savvy (though who knows, about anyone really, beyond CCJs and credit references), the risk of Universal Credit stuffing up her finances suddenly or beyond her control, is relatively small.

I suspect that for people who aren't very proactive about understanding the system, implications of the changes and responding to them, UC could result in them suddenly having less money and not being able to pay for things.

And that was nice of you to say, BlueStones but I'm not being nice, necessarily, I just want to get a tenant in my house paying me rent! Fingers crossed.

I have rented to three sets of tenants claiming housing benefit (and receiving it directly themselves). No problems other than a temporary blip with one tenant who was investigated for suspected fraud following a malicious allegation by her ex husband that she was cohabiting with a new boyfriend (she wasn't, it all got sorted out after 6 weeks, the arrears were then cleared).

On the other hand, my current - working, and perfect on paper - tenants owe me 5 months rent and I have had to obtain a possession order and am now waiting for a bailiff date. Nightmare! Thankfully insurance is covering most of the losses and costs but I am dreading what mess and damage the tenants will leave.

So on my experience, housing benefit tenants good, model working tenants bad!

I would always insist on a guarantor with housing benefit tenants and most letting agents recommend doing so. Also check your mortgage company and rent guarantee insurers are happy with the letting.