Active discussions

Meet the Other Phone. Child-safe in minutes.

Meet the Other Phone.
Child-safe in minutes.

Buy now

Please or to access all these features

Talk
Property/DIY

Join our Property forum for renovation, DIY, and house selling advice.

Original poster

Benefit vs self-funding tenants. Honest thoughts?

27 replies

samosamo · 30/03/2021 13:25

Just a quick one:

For those of you who are LLs, do you have a preference?

I know LLs can't discriminate now, but all things being equal if you had two sets of tenants one in receipt of housing benefit and one set that is not, which would you choose? What are the pitfalls/advantages for both?

OP posts:
diwrnachoflleyn · 30/03/2021 13:29

The self-funding one.

LadyCatStark · 30/03/2021 13:31

Honestly? The self funding one. I think people look after things more if they have to pay for it themselves. We’ve only had one tenant on housing benefit and she was enough to put us off for life. We were basically social workers for the 18 months she lived there.

callthevet · 30/03/2021 13:32

We are landlords. If tenants have HB once they are our tenants no problem with that. However we have a rent guarantee insurance that means tenants are credit checked to make sure they can pay the rent and have no CCJs etc. This excludes those on HB for this

HenDo999 · 30/03/2021 13:33

Self funding.

Purely because if she doesn’t pay she’ll be told that they have to stay in the property until there’s a court order(?) in place or she’s voluntarily making herself homeless.

ComtesseDeSpair · 30/03/2021 13:47

Fortunately, I never have to make the decision: housing benefit / UC simply doesn’t pay enough in the area where my rental property is for claimant tenants to get anywhere close to meeting affordability criteria.

I can imagine it would be a difficult choice sometimes otherwise, I’ve had applicants on benefits who seemed lovely and had good references (just couldn’t afford the rent) and plenty of experience of awful working tenants both as a landlord and a neighbour.

JSL52 · 30/03/2021 13:51

Self funding only because my insurance doesn't pay me for HB tenants.
Can't take the risk. Yes don't make any money it just covers the mortgage.

Anothernick · 30/03/2021 13:58

You may find that your council does private sector leasing, which means that the council, or an agency working on their behalf, pay you the rent direct and then sublet to tenants from their waiting list. The rent is a bit below what a private tenant might pay but there are no void periods and they do basic maintenance so it's a good deal on the whole. Most London boroughs do this but I don't know about the rest of the county. But a lot of mortgage companies don't allow this kind of arrangement so if you have a mortgage on the property you need to check with your lender.

Megan2018 · 30/03/2021 14:03

I only take self funding but the rent is so high (market forces) that the affordability check excludes HB anyway.
Like PP my rent guarantee insurance precludes HB.

Notanotherhun · 30/03/2021 14:04

We have council housing next door and their back garden is a disgrace.

EssentialHummus · 30/03/2021 14:04

Same as callthe and JSL. But if that restriction wasn't there, I'm interested in who is employed/solvent, more likely to be able to pay long-term and less likely to damage the property.

Original poster
samosamo · 30/03/2021 14:05

Thanks all.

Mine is in London and because rents have fallen the guaranteed rent and guaranteed that it'll be returned in good order allowing for fair wear and tear is looking good for the first time.

Very interesting that LLs can no longer discriminate against HB, but peripheral businesses still can eg insurance. I didn't know that. Thanks

OP posts:
GeidiPrimes · 30/03/2021 14:07

It would depend on differing circumstances for me - if somebody was receiving benefits to top up their wages, fine.

Original poster
samosamo · 30/03/2021 14:07

@Anothernick

So the LA is the tenant, then? Does this invalidate some insurances, too? I imagine the LA could sublet it to low paid working tenants....

OP posts:
Blurp · 30/03/2021 14:19

Wouldn't mind either way. Had HB tenant in the past, who was great. Had private tenant who was fine, but lost his job and couldn't afford rent any more.

The house I let out is reasonably close to a university, so it's reasonably easy to get a couple of PhD students who want to be a bit further out but still close enough to walk.

Current tenant is a friend of a friend; when they move I'll most likely ask around for another FoF who's looking for somewhere. Don't care what their circumstances are.

ChilliChaos · 30/03/2021 14:49

Would it change your choice if the prospective tenant was on benefits due to a disability? This is the position I’m in and am finding it difficult to find someone to rent to me.

Trickyboy · 30/03/2021 16:04

@callthevet

We are landlords. If tenants have HB once they are our tenants no problem with that. However we have a rent guarantee insurance that means tenants are credit checked to make sure they can pay the rent and have no CCJs etc. This excludes those on HB for this
That's interesting .. are the rent guarantee insurance people therefore suggesting that all HB tenants are not credit worthy ? (HB becoming increasingly rare these days and now only Tax Credit/ESA /low wage ..mostly Housing Allowance via UC) .. That's a bit of a sweeping generalisation and counts out a lot of good prospective tenants.

My daughter has had HB for many years. Her landlord has never known. Her credit is A1. Her income (32k a year so not 'poor' is simply too low for private rental for herself and child. UC housing allowance tops it up.

UC pays her. She pays the landlord. They are none the wiser as to where their rent payment comes from. With the level of discrimination in the system. (I appreciate this is mostly LL insurance rather than LL) it's no wonder she keeps it to herself.

Mind you - never been asked and if she was and lost her tenancy that would be an interesting court case.

diwrnachoflleyn · 30/03/2021 16:15

@ChilliChaos

Would it change your choice if the prospective tenant was on benefits due to a disability? This is the position I’m in and am finding it difficult to find someone to rent to me.
A lot of LL's don't want a tenant who is there 24/7. This is why there's also a lot of 'no kids' or turn down young families with a SAHP.
murbblurb · 30/03/2021 16:16

for the basic question - whichever your insurers will accept, as well as your gut feeling.

BUT

if this is a council rent-to-rent scheme then do not touch with an extremely long bargepole. Those guarantees are worth buttons. And who do you think they will put in your property? The ones no-one else will accept!! You will have no control over who is there and your insurances may be invalidated as the council is your tenant, not the actual people.

Ask this question on landlordzone with the full details and see what they say. ..

drop the rent and get in some people that will be your actual tenants.

diwrnachoflleyn · 30/03/2021 16:47

@murbblurb

for the basic question - whichever your insurers will accept, as well as your gut feeling.

BUT

if this is a council rent-to-rent scheme then do not touch with an extremely long bargepole. Those guarantees are worth buttons. And who do you think they will put in your property? The ones no-one else will accept!! You will have no control over who is there and your insurances may be invalidated as the council is your tenant, not the actual people.

Ask this question on landlordzone with the full details and see what they say. ..

drop the rent and get in some people that will be your actual tenants.

This!
JSL52 · 30/03/2021 17:49

@ChilliChaos

Would it change your choice if the prospective tenant was on benefits due to a disability? This is the position I’m in and am finding it difficult to find someone to rent to me.
It's not that I wouldn't want to , my insurance would be invalid. I was on HB myself years ago so I'm not against anyone claiming it.
huitlacoche · 30/03/2021 19:10

@JSL52

Self funding only because my insurance doesn't pay me for HB tenants. Can't take the risk. Yes don't make any money it just covers the mortgage.
having your mortgage paid is making money, they are paying off your house ...
SapatSea · 30/03/2021 21:22

I'd check your Buy to let mortgage terms - many have a list of "acceptable tenants" as do Landlord Insurances (as already mentioned).

ForensicAccountant · 30/03/2021 21:44

having your mortgage paid is making money, they are paying off your house ...

Most buy-to-let are interest only

Chimeraforce · 30/03/2021 21:46

Self funding.
If they're in receipt of u. c then generally their rent is paid directly to the claimant. It is then down to them to pay their landlord. Some do some don't.

huitlacoche · 30/03/2021 21:57

@ForensicAccountant

having your mortgage paid is making money, they are paying off your house ...

Most buy-to-let are interest only

fair enough but having a spare home with equity growing in it whilst tenants cover your bank loan interest still isn't exactly 'making no money'