200 Housing benefits tenants are served section 21 notice by Kent Landlord

200 Housing benefits tenants are served section 21 notice by Kent Landlord

13:27 PM, 9th January 2014, About 9 years ago 50

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Kent based Landlord Mr Fergus Wilson reported to the press that he has served section 21 notices to more than 200 tenants on housing benefits asking them to leave after six months.

Mr Wilson has a portfolio of over 1000 properties and has decided not to rent in the future to tenants claiming housing benefit preferring instead tenants from Eastern Europe who he says are more likely to pay their rent on time.

Mr Wilson said, “this decision is only down to money it has nothing to do with the personalities involved.

“When it comes to money over half of people on benefits were defaulting on their rent, and when it comes to people who are working, we’ve not had one single person default on one single penny. You can appreciate why. Rents are going up in line with the price of houses and housing benefit levels are dropping at the same time.

“Tenants from eastern Europe, places like Poland, have been here a number of years now and have built up a good enough credit rating to rent privately. We won’t see the impact of more recent migration for years to come, but people on benefits are having to compete with them.

“My message to people is get yourself a job, and you will get yourself a house.”

Mr Wilson also added “The problem is that you have a finite number of houses, but more people wanting to rent them than places are available. With that pressure, what tends to give is the poorest people at the bottom of the economic pile.

“We are going to be in a position in the next 20 years where it becomes more and more difficult for people to find housing, and no one seems to have an answer. You tell people in a place like Ashford that they need more housing and they’re likely to lynch you they are sick of being built on, but it’s a fact.”

The NLA has also released a statement regarding this story in the press:

Chief Executive Officer, Richard Lambert said, “our current research shows we’re seeing more and more landlords moving away from renting to tenants claiming benefits.

“It was widely assumed that rent rises were fueled by housing benefit, and that if benefit rates were reduced, rents would fall back to meet them. That’s been shown to be a completely false assumption. There are many wider factors affecting rent levels, principally the availability of properties and the number of people looking to rent.

“As the Welfare Reform agenda has progressed over the past three years, benefit levels haven’t kept up with rents, meaning it’s a greater risk for landlords renting to tenants who rely on benefits, which is why they are looking more and more to working tenants who don’t tend to fall into arrears that easily. The fact is that there are many more working tenants looking to rent because it is still so difficult for first-time buyers to get onto the housing ladder. “However, we know of many landlords who have rented to housing benefit tenants on for many years and have never had a problem, so our advice would be to always look at every tenant on an individual basis.

“Being a landlord is a business and there are landlords who specialise in letting in the housing benefit market. They tend to be the more experienced landlords with larger portfolios, who understand how to manage tenancies to ensure stability and minimise the risk of arrears.”

The following interview with Fergus Wilson appears courtesy of Property Tribes

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Comments

Jeremy Smith

16:28 PM, 12th January 2014, About 9 years ago

Reply to the comment left by "Gary Nock" at "12/01/2014 - 13:21":

Well Gary, That's what I thought.
This senario is what had been suggested to a local agent from a Housing Benefits department employee.

If the tenancy agreement says that deductions from the deposit can be recovered from rent payments, then if the deposit falls to (or begins at) zero, then the landlord can claim from the rent payments to top up the deposit ?
In my previous agreements it used to say that I can claim from the tenant amounts deducted from the deposit at the next rent date.

But I think I am going a bit off topic again, it was just a way of trying to get the rent paid to the landlord from day one.

I agree, a bit of a sticky wicket if it came to testing it out.

Gary Nock

16:50 PM, 12th January 2014, About 9 years ago

Hi Jeremy. Any deductions from the deposit have to be in accordance with the scheme rules of whatever scheme you use and the tenancy agreement. If the deposit is in the DPS custodial scheme you cannot get at it anyway until the end of the tenancy. So as you say trying to use the deposit/rent mechanism as a vehicle to circumvent the direct payment restrictions is a bit fraught. The advice on other posts on the forum seems to be take two months rent as a deposit and get a guarantor with rent insurance guarantee. If tenant falls two months in arrears then LA will consider direct payment but by the time they get round to it its 3 months arrears. By which time the insurance will be evicting them anyway. So with this as a landlord you should not be out of pocket. Cash flow may suffer for a few months but eventually works out.

But why put yourself through it.

Jeremy Smith

18:40 PM, 12th January 2014, About 9 years ago

Thanks Gary, it was just what the agent I spoke to was doing in association with their local HB office, presumably to help keep people in their homes.

Neil Robb

21:11 PM, 13th January 2014, About 9 years ago

Reply to the comment left by "Neil Patterson" at "10/01/2014 - 10:41":

Hi Neil

I work from 17 years old to 43 lost my job through no fault of my own.

I used to run three business and worked fulltime. I had 27 staff paid all that I had to.

I then was told £65.00 a week for 6 months only as I had paid in over the years. That's what would happen if you ever needed help if things went bad.

After four months of embarrassment I could not go back to sign on.

10:50 AM, 18th January 2014, About 9 years ago

This Fergus Wilson story refuses to die!

Lord Freud has even commented.

Whilst I do not agree with everything Fergus says, or the way the story has been reported by the media (i.e. calling a Section 21 notice an "eviction notice"), I do think it is very positive and healthy that this story is gaining so much traction and causing such conversation and interest.

If you do not let to LHA tenants and think it is of no importance for you, it's worth a reminder that any "private" tenant is only one redundancy or crisis away from becoming an LHA tenant.

This issue is therefore relevant to every single landlord in the U.K. imho and I hope it stays at the top of the forums!

Gary Nock

13:48 PM, 18th January 2014, About 9 years ago

They are Vanessa thats why landlords should always use rent insurance guarantee from a reputable provider. I pay £127 a year block cover for each property on my portfolio and although its a lump sum every 12 months I pay it in the knowledge that even if a tenant falls on hard times I will not.

Tony Sheldon

17:03 PM, 18th January 2014, About 9 years ago

I agree wholeheartedly with Gary. For a mere £10 per month extra we offer an ongoing rent guarantee for total peace of mind. This means that with lettingsupermarket.com, you can have a fully managed service with a rent guarantee for only £34.99 + VAT per month. No wonder some online agents are frightening the competition!

Gary Nock

17:48 PM, 18th January 2014, About 9 years ago

Tony the writing is on the wall for some HighSt letting agents. Look what is happening to other retail sectors and you can see what way it is going. I am letting my own properties quicker online, with better tenants who do not feel ripped off having to pay £400 "application fees" as charged by some of my local agents. We all know what referencing costs and it isn't £400. I am not saying all High St agents charge this but its a lot more than I charge. No wonder the OFT are looking at the sector.

Tony Sheldon

18:14 PM, 18th January 2014, About 9 years ago

Hi Gary. The problem is also that there seem to be so many additional charges now from some agents. Tenancy renewal charges for both landlord and tenant of £80 to £150 each every 6 or 12 months. Our software does it in 30 seconds and once our landlords are signed up to a package they only pay the package price each month for the duration of the tenancy.

Gary Nock

18:26 PM, 18th January 2014, About 9 years ago

The only drawback I suppose is the High St agents are visible and present in the event of a problem. And some landlords are unsure of the processes if they do a lot of it themselves. So it's almost as if a "halfway house" is needed with a central online main operation and some sort of local physical and present support for landlords who do not want to do any part of the process themselves other than initiating the advert.

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