Profile incomplete
by Mary Latham
16:42 PM, 30th December 2012, About 11 years ago 79
Text Size
In the West Midlands we are addressing the issue of educating the young to understand their future housing options, financial obligations and choices. I work on behalf of NLA with a consortium called HOMESTAMP (www.homestamp.com) and we are just coming to the end of a major project to get a module into the national curriculum for 14-16 year olds. Under the subject of Financial Management this module will help to break the cycle for many young people to prevent them becoming the 4th generation of their family to base their lifestyle on “benefits will provide”. This will be a reality check for those who may believe that becoming pregnant will ensure them a “nice little flat off the council”.
All local authorities are becoming more and more reliant on the Professional Rental Sector (PRS) to help them to house their homeless and it is vital that young people are aware that their only future options will be to stay at home, provide their own homes (by renting or buying) or to convince a private landlord that they will be a good tenant. By the time these young people leave education the Universal credit will be in place and there are serious concerns that giving people a “purse of money” will further increase rent arrears, not only for the PRS, but also for local authorities and Registered Social Landlord’s (RSL). The utility companies will also become victims of those who choose to misuse the money provided to them, from our tax pounds, to keep them safe.
We all learn from what we absorb and young people who are brought up in families where no one gets up in the morning and dashes off to work become accustomed to this life style for them it becomes the norm. It will take some time to re-educate these youngsters that there is another way of living and that the alternative may, in future, be their only option. We need to appeal to the innate desire of each new generation to rebel against the lifestyle of their parents. No one wants to live in a society where we don’t care for those who need our help and financial support but it is in meeting the needs of the needy that we also fall victims to the greedy. I am well aware that it is becoming increasingly difficult to find work and that withdrawing or reducing benefits alone is not the answer but we must start with motivation, because it is only motivation that will break the cycle. We need to get to the point where young people leave education “knowing” that the next step is to find a way to fund the life that they plan.
Schools need to play a major role in making these youngsters aware of the life that they could have rather than allowing them to become myopic about their future. Parents also need to play a part. Those of us who do work often allow our offspring to open an account at the bank of mum and dad and, while this may be necessary during the years that they are in education, we need to close their accounts one month after they leave education and motivate them to become self supporting and to gain the dignity that comes from paying your own way. It is selfish of us to want to give our kids what we did not have because in doing so we take away from them one important thing that we did have, MOTIVATION. I consider myself fortunate that my parents could not afford to allow me to remain unemployed, I grew up knowing how hard my parents worked to fund our simple lifestyle and I could not wait to earn my own money. I knew what I wanted, I also knew that the only way that I would get that I wanted was to work.
As a tax payer, I welcome the Governments plans to gradually reduce the “dependence” mentality of many people in this country. As a landlord, I do fear that some of these plans may impact on my own income. All landlords are only one redundancy away from a tenant who is on benefits and we all need to position ourselves to ensure that whatever else comes out of that “purse” of universal credit our rent comes out first. ALL Assured Shorthold Tenancy’s (AST) should carry a clear clause that the tenancy is only granted on the basis that if now or at any time in future the tenant needs to claim benefits to help to pay all or part of the rent that rent is paid directly to the landlord. Under new Government guidance issued this year, local authorities should pay the rent directly to the landlord who only grant tenancies based on direct payment, as part of their safeguarding policy. Local authorities were given discretion on this, unfortunately, and it is up to the PRS to ensure that this discretion is exercised in our favour. Landlords should attend all local authorities landlords fora and landlord meetings and be very vocal about the fact that we will not be become part of the welfare state, we will not pay into a system that gives people financial support without protecting our tax pounds by ensuring that the money given is used to keep a roof over the claimants head. We will be taking legal eviction action and pursuing our rent arrears and we will refuse to house those who we fear will not pay for the service that we provide. All these authorities are only too well aware that without the PRS they are in BIG trouble, the day has arrived when they need us more than we need them and it is time that we set out clearly our terms of business.
You will often hear the term “financial inclusion”, what does that mean? It means that no one should be excluded from society because they have a lack of money and I absolutely agree with that. But there are accepted norms in our society and among them is the implicit understanding that goods and services must be paid for. Most of us arrange our finances so that the bills are paid before we spend on other, less important things. Most people use a system of standing orders and direct debits to avoid the temptation to put our desires before our obligations. Financial inclusion in our society means helping those who do not have the skills to manage their finances to follow these “norms”. Many people have poor financial histories and cannot gain access to the high street banks but Credit Unions will take these customers and most will “ring fence” their rent payments if landlords work with them. They will also send a landlord written notification if the tenant exercises his right to stop a standing order and, because they require one months notice to do this, the landlord has time to take appropriate action. The landlord will also get written notification if a tenant tell the Credit Union to change his rent payments from you to another landlord and again this is early warning that a tenant may have abandoned the property. Abandonment is fraught with potholes for unsuspecting landlords. Some landlords use what are known as “abandonment notices” on the door of the property but these notices have no legal status and will not protect a landlord against accusations of illegal eviction and the horrifying penalties that may follow a successful conviction. A tenant who has given a Credit Union the required written notification to change the recipient of their rent payments has committed himself in writing to the fact that he has changed his prime residence and the written notification that the Credit Union will send to the landlord may be just the document you need to cover your back.
The PRS must survive because without us we will have “cardboard Cities” all over this country. I believe that the Universal Credit will bring us closer to the day when Government have to face the fact that
Landlords are running a business, a business which is vital to the future of this country and the well being of those who live here. Landlords need to be paid for their services just like any other business. Without homes, people will sink into further dependence and put pressure on the Health Service, the Legal System and society in general. The UK will not be a place where people want to make a life and bring up their children. We will not hang onto the many talented young people who are the future of this country. We will become a country of lawlessness, worklessness and hopelessness.
This article was first published on 15th December 2011 and has been re-published on 30th December 2012 following recent media reports of a survey carried out by Housing Charity “Crisis” which indicates that only 1.5% of Private Landlords now rent to tenants claiming benefits.
Previous Article
Landlords Exit Strategy - Readers CGT Question
Mark Alexander - Founder of Property118
15:07 PM, 29th December 2011, About 12 years ago
Searching Google is the easiest way to find the article, they still need to leave a comment as well
Jonathan Clarke
15:55 PM, 29th December 2011, About 12 years ago
Hi Mary. I`m not sure why to be honest. I may research the history as to why it is like this -as it intrigues me. The more i think about it the more it irks me. Tesco is a multi million business so they would not miss a 50p mars bar as much as maybe i would miss £750 rent so I can only think there must be an historic reason why non payment remains civil not criminal. There is no reason why Tescos in this day and age could not do DD before you enter their store and then do their own civil prosecution if someone steals from them rather than draining the public purse. Instead they rely on the police and magistrates do prosecute. That costs the taxpayer. Tescos will either absorb the costs of the good if not recovered or raise their prices to compensate. The way the system is changed is only by legitimate pressure brought upon the powers to be. Yes it has to gain support so a winning argument has to be put forward. There would have to be a trade off somewhere along the line I suspect so that tenants and their support networks would in fact also welcome legislation as it may in fact enable them to keep their home if an agreement to pay off arrears could be hammered out and enforced. The money is often `lost` due to human weaknesses and temptation. It should be made harder to succumb to such human failings. A tesco security guard is a deterrent to theft. Therefore payment direct from the council ( LHA ) is an equivalent deterrent. If private then Direct Debit and standing orders assist but are not foolproof. Why not go the whole hog like the tax man does and deduct it from earnings. As a house is such a fundamental essential to any semblance of a normal life then should it not perhaps get preferential treatment? That would be for the benefit of landlords/ tenants and of course the public purse which ultimately picks up the tab when it goes wrong and people get evicted for non payment. Everyone loses out if that happens so all should work together to prevent that lose lose scenario
19:29 PM, 30th December 2011, About 12 years ago
I am glad my small post has genereated ineresting responses regarding payment of rent etc.
Rgarding such and using your analogies; what is the diiference between someone walking out of Tesco's with a trolley load of unpaic goods and somone not paying rent.
Both are needed for life to exist.
One opf them namely the Tessos THEFT you could be arrested for.
The other is treated as civli offence which you may remain committing the same offence of not paying rent until you are eventually evicted!
Now Tesco's may not go bankrupt if a trolley load of groceries wasn't paid for; they would everybody did the same thing though, but a landlord could well be forced into bankruptcy through rent not being paid.
Now you could say that such a landlord should have more resources or insurance policies in place to prevent such a situation occurring.
However that is not really the point.
The fact is as has been suggested in previous above posts; there seems to be the presumption that landlords should be capable of and should suffer unrecoverable losses in the event of a tenant CHOOSING not to pay rent.
The county court system does NOTHING to protect landlords from unrecoverable losses.
The resultant effect may well be the mortgage company repossess the BTL property.
If sold at a loss the BTL mortgage company applies a charge on a landlords residential property.
Attempts to exercise the charge leaving the landlord homeless.
If the charge is insufficient to recover losses thet will try for an attachment of earnings order against the now homeless landlord.
The landlord loses all capital appreciation built up in the residential property and the BTL one caused by appropriate deposits to purchase those properties
What happens to the tenant who has caused so much detriment to the landlord!
Absolutely nothing.
Why therefore should the system allow so much detriment to occur to a LANDLORD.
It does appear as has been suggested that for some reason landlords are 'rich' and should therefore suffer because of this common fallacy.
If business's were treated like landlords are the country would be MORE bankrupt than it already is!!!
I totally agree with Johnathan, non- payment of rent should be a criminal offence, with ALL the ramifications of that being the case for the tenant.
If it were the case I think you would see a rapid sea change in how tenants view their behaviour and might actually start complying with the terms of their tenancy agreement!?...............................OOPS!...back to the real world.
We all know that WILL never happen so we as landlords have to be on our utmost guard against wrongun tenants as we know we are not going to obtain any help from anyone except perhaps fellow landlords.
This is why LRS is part of the fightback against wrongun tenants; it is not a total solution, but it is certainly better than what we had before.
Lets hope LRS can carry on building further anti-wrongun tenant solutions so that we landlords may conduct business without the risk of losing the roof over our own heads!!!?
Mary Latham
12:11 PM, 30th December 2012, About 11 years ago
More and more landlords are turning their backs on tenants who rely on LHA. There are several discussions going on at the moment and I am experiencing Déjà Vu Look at this discussion, from September 2011,
Follow me on Twitter@landlordtweets
Mark Alexander - Founder of Property118
12:53 PM, 30th December 2012, About 11 years ago
Me too Mary, I've just applied to start an e-petition to criminalise none-payment of rent and improve possession procedures. It will take around 7 days for the petition to be reviewed and published. We then need to get as many people as possible to promote it. I see no reason why tenants would not sign it either as there are far more good tenants than bad ones who spoil it for the rest. It's a very sad state of affairs when Housing Charity crisis state that only 1.5% of landlords now let their properties to benefits claimants. The problem is not that 98.5% of benefits tenants are bad, it's that landlords are choosing not to take the risks associated with outdated laws and allowing people with no money to take posession of their properties.
Chris Best
19:01 PM, 31st December 2012, About 11 years ago
At the risk of adding more fuel to the fire (where does the custard come from?), my personal view (and over-generalising wildly here) is that landlords tend to come from one generation older than their tenants. Our generation grew up in periods where money was tight, and budgeting was a necessity - so we learned how to do it because we had to. Our tenants' generation grew up in a period of plenty, budgeting wasn't necessary and ample supplies of cash to our children was taken for granted. So they have never learned to budget. Add to that the welfare state dependency culture with (as Mary notes) families for whom the discipline of daily work has never been present in the family as a role model, and you end up with a societal group unable to budget, unable to create wealth, and believing that the state owes them a living.
So no small wonder that the PRS is reluctant to let to this group since there is no social obligation to pay what is owed - including to landlords. And when, towards the end of the month, the money runs out, the rent is due and the cupboards are empty, can we in all honesty insist on rental payments if we know this takes food off the table? No, these moral dilemmas are not what the PRS should be asked to take on, this is the state's role. We also have an obligation to our families to keep a roof over their heads and food on the table, we should not be acting as a cash reserve for this social sector.
And that is why I will not rent to those on benefits unless I know them well. The prime rationale for this is however none of the above, it's the incompetence of social security departments. I have let to members of my extended family on benefits, and the inability of the local council to process benefits and make the correct payments on time is breathtaking. Their clients are those in society most vulnerable to any problems with cashflow, and if the social security payment is late, then the rental payment is going to be late. Do we evict these tenants for late payment or do we effectively subsidise them - and thereby the social security system for its mistakes - by taking the cashflow hit?
As a landlord, I want my tenants to pay on time and the agreed amount. If they can't do that, then they should leave, and most of my tenants accept this concept. But if they can't pay because of the fault of a state agency, why do I have to penalise the tenants for that state agency's mistakes? That's not a position I want to be in, and this is why I, and I believe a whole host of other private landlords, will not let to those on benefits.
1:20 AM, 1st January 2013, About 11 years ago
I think you are misguided about the PRS responsibilities.
It has NO responsibility to any tenant who if they pay the rent cannot afford to eat.
Tough!
We PRS LL are NOT charities.
I agree it is unfortunate but it is NOT my problem if my tenants starve because they pay me the contractual rent they have agreed to pay.
I am not in a financial position to subsidise their lifestyle.
So if I receive no rent I starve!
Why should I starve and NOT my tenants!?
Someone who provides a service should not have to suffer if the service they provide is not paid for and if it is, it causes severe detriment to the service user.
This idea that LL should not penalise their poor tenants, feeds into the societal belief that LL can afford it as the are all 'rich'.
This is NOT the case for the vast majority of LL in the PRS.
The PRS has NO obligation to keep a roof over the head or food on the table of their tenants.
Irrespective of a tenant's problems , if they don't pay rent they should leave no matter WHAT difficulty it causes them.
A LL is under no obligation to assist a tenant's lifestyle.
If a tenant cannot afford the service a LL offers then tough, they should leave.
I can't afford to hire a RR car, so I don't; but if I had resources I might just rent one.
The same decisions have to be made by tenants.
The fact that they live in an investment the LL has made and it is their home is irrelevant,
NO ONE has a right to a home in the PRS.
There maybe an argument to be had that society should be obligated to house it's population; but it is not something that the PRS should be responsible for!
Mark Alexander - Founder of Property118
2:21 AM, 1st January 2013, About 11 years ago
Paul, how can Chris be misguided, you are saying pretty much the same think aren't you?
7:11 AM, 1st January 2013, About 11 years ago
Oh must have missed that, sorry for the duplication therefore of the comment content.
Mary Latham
14:12 PM, 1st January 2013, About 11 years ago
I have been re-reading this conversation and I think a good slogan for the PRS is
TREAT LANDLORDS AS YOU TREAT TESCO.
Taking Maslows base line Tesco provide the food. Landlords provide the place to cook and eat the food, additionally we provide the place to enable all the other basic needs water, sex, sleep, excretion.
Like Tesco, most of us would cope with minor losses but we cannot and should not need to, cope with blatant abuse.
Stealing food to feed your hungry family is a criminal offence. Stealing a home to shelter your homeless family should be too. A person can survive longer without shelter, in the UK, than without food and therefore the motivation to steal food is greater than the motivation to steal a home.
Follow me on Twitter@landlordtweets