McDonnell’s distorted and dangerous version of Right to Buy9:01 AM, 5th September 2019
About 3 weeks ago 35
I was surprised to see that Shelter still hasn’t given up on its campaign to prevent private landlords from using the phrase ‘no DSS,’ and that it is continuing to spend its considerable financial resources on this. This is despite the overwhelming evidence in research by Openrent that 90% of tenants on benefits want to know if the landlord genuinely will accept them or not – so Shelter is doing the diametric opposite to what those it purports to advocate for would wish it to do. This represents a scandalous waste of money.
Shelter also continues to argue that it is no riskier for landlords to accept tenants on benefits (easy to say when you’re not the person taking the risks). I believe I have thoroughly refuted this puerile argument in a previous article where I allude to the complexity of this issue, but also to the simple economics which is that Housing Benefit only covers 57% of the cost of a market rental. Why would anyone take on as a tenant someone who so clearly cannot afford to pay the rent? Click here.
However, I have come across another reason this week, which is that Universal Credit has completely shifted the risks private landlords now face with tenants on benefits; namely that landlords cannot trust the staff at the DWP even when they give their word that they will pay the landlord direct after a tenant has not passed on a previous payment.
A colleague in Swansea had two tenants who stopped paying the rent earlier this year. He gave them a few months’ leeway, as they kept promising to pay. However, when he visited he says that they looked like they had become drug addicts and the male tenant became verbally abusive.
He therefore followed the correct procedures, completing a UC47 to get direct payments. As a precaution, he also had numerous conversations with the DWP to ensure all went smoothly. The tenants were by now over £1,000 in arrears. So the main priority was to make sure they received no more money and that it came directly to him. He also issued a Section 21.
The landlord told me:
“I knew the telephone conversations were recorded and so I made it very clear I would be claiming compensation if any more money were paid to the tenant. My mentioning ‘compensation’ seemed to rattle the member of staff and she rang me back to tell me that there was no need to worry and that the next payment would definitely come to me during the first week of May. She said I didn’t need to take any further action as it was all set up.”
Time passed and no money had arrived in the landlord’s bank account by the 9th of May, so he rang the DWP. As usual, there was a long wait on the phone, until eventually he was told that a different member of staff had over-ruled the previous arrangement and had sent the money again to the tenant a few days earlier.
Naturally, the landlord was furious and complained to the Complaints and Correspondence Team. Unsurprisingly, after a long wait, his claim for compensation was refused and he was told that even if the DWP makes mistakes which result in the landlord suffering a loss, there is, in fact, no mechanism for compensation (which there was under the previous system). So basically, the DWP can mess up as much as they like and the landlord will pay for their mistakes.
What I take from this is that the DWP cannot therefore be trusted to pay the housing element to landlords. The safety net which previously existed – whereby if the tenant was two months in arrears the landlord could get direct payments – has gone or at least is completely unreliable.
This brings the whole system into disrepute and acts as yet another disincentive for landlords to accept as a tenant anyone on benefits. The landlord in question is patiently explaining this to the many prospective tenants on benefits who apply for his housing. He will now only accept people in work, because if the tenant turns rogue, the authorities will enable that tenant to effectively defraud the system, the taxpayer and the landlord. There is no justice for the landlord in this new system.
I am sure that similar scenarios are taking place across the country under the new Universal Credit system. Please feel free to relate your own experiences in the comments section below. This could be a valuable source of information to pass on to Amber Rudd, Secretary of State for Work and Pensions.
I won’t, of course, hold my breath for Shelter to bring it up in one of their suspiciously easy to obtain high-level meetings with Government, however – as this would mean them championing private landlords actually receiving the rent to which they are entitled. That just wouldn’t do.
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