Mortgage Brokers across the UK have been advised by Nationwide Building Society’s specialist buy to let mortgage arm (The Mortgage Works) that they are changing their criteria to stop buy to let investors letting their properties to tenants in receipt of benefits.
A survey from housing charity Crisis, released just before Christmas, claimed that 98.5% of landlords don’t accept benefits tenants already. We doubt very much that’s true as in some areas of the UK vast elements of the population are claiming benefits and renting from private landlords.
Could this move from The Mortgage Works be a knee jerk reaction to Universal Credit perhaps? When that kicks in no landlords, private, charity housing association or other will have rent paid directly to them. When the new rules take effect all benefits will be paid directly to tenants which many believe will be a recipe for disaster.
Might this be the Governments way to convince a large section of our indigenous population that living off handouts isn’t the way forward?
Does The Mortgage Works policy make sense?
Many landlords will agree that as it’s virtually impossible to recover any unpaid rent or costs of damages from a benefits claimant and therefore, it makes commercial sense not to rent to them anyway. On the other hand, some landlords have no choice.
Questions have also been raised as to what happens if a tenant falls on hard times during a tenancy and resports to the benefits system. Will their landlords now have to serve notice on them and re-let the property to people not claiming benefits?
The social implications of this are also potentially massive. Everybody needs a roof over their head. If people can’t buy or rent properties, how long will it be before we see the masses living in tents?
About Mark Alexander
Mark and his family have been investing in property since 1989, initially in the Norwich area but more recently across the length and breadth of England. Mark created Property118.com as a social network for landlords with a vision of becoming the UK's best respected online property community. Mark is also a freelance internet marketing consultant to law firms Email - firstname.lastname@example.org