15:24 PM, 1st March 2013, About 10 years ago 1
Currently there are over five million people claiming LHA and this is set to grow over the next 2-3 years as we face a tough economic period and continued austerity measures from the Government. According to Dssmove.co.uk, letting agents and landlords will miss out if they ignore LHA tenants.
In many inner-city areas in the South West, Wales, Midlands and the North East and West LHA rates are sometimes higher than the market rent. Therefore, in order for landlords to achieve this higher rent yield, they need to move into the DSS market as private tenants will not pay the same level of rent in some areas. i.e. two bed LHA rate in Wolverhampton is £450 and many properties are on the open market rent £350 – £400.
Anecdotal evidence suggests that at least one in five mortgage lenders stipulate they will not accept LHA tenants, while four out of five do not make any reference to LHA tenants. There have been cases where the lender has no objection to a LHA tenant, but when the valuer appraises the property, they report they it should not be for LHA tenants. So landlords need to shop around if they want a lender for a property specifically for DSS tenants.
Aki Ellahi, Founder of Dssmove.co.uk comments: “As a landlord and letting agent with over 500 properties on my books, I am always surprised when I hear agents say they won’t touch LHA tenants because they are a ‘bad risk’. Time and time again I hear the same complaints – they don’t pay their rent, won’t respect a property and are very unreliable. I don’t agree with this general view, as I think it is more ‘fiction’ than ‘fact’.
“Well over 95% of my business is LHA tenants and in over 30 years my family and I have been landlords, we have found that private and benefit tenants can cause the same problems. By being especially selective, we’ve seen very few problems over the years. In fact, our void rates have been around 2-3% per cent, which is in line with average annual void periods for private tenants.
“Regardless of what happens with the introduction of Universal Credit later this year, the DSS market will always exist. The more difficult the Government makes it for private landlords to rent to this LHA tenants will mean more business for letting agents, who really understand this market and can help protect individual landlords from this perceived increased risk. What is for sure is that landlords, tenants and local authorities will have to work together to ensure the smooth transition from LHA to Universal Credit.”
Though city centre agents like Foxtons will not deal with the DSS market, many independents do and some of the corporates have spotted the gap and are moving more into this market ie Martin & Co, Northwood. For many landlords and agents across the UK – especially in the North – there will be no choice about accepting LHA tenants in 2013 and beyond.
Dssmove.co.uk is a free of charge service for lettings agents who sign up and their properties will be displayed on Dssmove.co.uk. Dssmove.co.uk works with over 250 lettings agents nationwide and has over 4,000 properties on its site.
For further information call 01902 773949 or visit www.Dssmove.co.uk