9:29 AM, 22nd July 2020, About 3 years ago 33
I have recently sent my email below responding to Shelter’s Polly Neate’s response as to why she thought landlords do not want to rent to tenants in receipt of benefits.
I am the Director of a Possession company for landlords seeking to evict bad tenants. www.PossessionFriend.uk
I listened to the response by Shelter – Polly Neate about why (she thought! – and she’s not a Landlord) Landlords didn’t want to rent to people in receipt of benefits.
There are a number of reasons why many landlords have actively diverted away from considering tenants in receipt of benefit, and its NOTHING to do with ‘stigma.’
Shelter published research (that they selectively use to suit their purposes) that is LHA rates do not pay the market rent of 90% of rental property.
This will be due in a large part to the rate freeze that the government imposed on Housing benefit rates in 2016, something that was only recently relaxed, however that has not allowed the overwhelming number of rented properties to ‘suddenly become affordable’
The point the programme host made about direct payment to landlords being deliberately removed under Universal Credit plays a massively important role, and not a ‘slight factor’ that Shelter under-played. Even where a tenant in receipt of benefit has had a period of not passing the housing element (benefit) of their UC onto the landlord, it’s the DWP’s instruction – ethos to revert to payment to the claimant as soon as possible, in many cases within 3 months (I have been told this directly by UC staff)
If payments have been going direct to a landlord, and U/C discovers that the claimant was for a period not entitled to state benefit (perhaps working whilst not disclosing – something the landlord would be unaware of) UC will immediately demand repayment by the landlord. This could be for a year or more’s benefit rental payments.
Withholding state-funded housing element of benefit from the landlord, which is the purpose tax-payers money was allocated to the claimant, should be made a criminal offence of Fraud. (Just as its Fraud to rent out an allocated Council house for rent whilst living elsewhere). Defraud the Local or Central government of money and it’s a criminal offence. When it’s a private individual, they have to take their ‘very poor’ chances with the Civil Justice [sic] system.
Civil law procedures of reclaiming a debt (rental payments owed are notoriously ineffective, more so for defaulters who have little or no assets that could be seized by bailiff’s or High Court Enforcement Officers. The majority of Tenants in receipt of benefit are likely to fall into this category.
A far higher proportion of tenants in receipt of Housing (or UC) benefit will be applying for rental property and won’t have a Guarantor. Neither Shelter nor Local Authorities are keen to advance their funds to guarantee the payment – damage liabilities of the would-be tenants that they expect private landlords to take a ‘risk on’
‘Jane’ was such an atypical benefit tenant that its taken Shelter since 2013 to find someone in receipt of benefits, that’s got a 10 year full rent payment record, (or, so we’re told) home-owning guarantor and rent in advance!
Would Shelter be ‘happy – content’ for letting Agents and landlords to advertise;
“Tenants in receipt of benefit, with a 10 year rent payment and landlord reference, Home-owning guarantor and advance rent, – may apply.” Is the absurdity of their case becoming apparent?
The programme highlighted that many Insurance companies will either not cover benefit tenants, or else will charge a higher premium, ask yourself WHY? The answer of Shelter is that premiums would either be none or a little extra cost, – who exactly do you think is going to pay the higher insurance premium? As the Tenant Fee ban has made any such charge unlawful. The government has ‘straight-jacketed’ the Private rental sector into its current modus operandi with almost every piece of regulation passed over the last 10 years but increasingly so since 2015. Many ‘drivers’ behind government policy have been campaigned by Tenant support groups. Tenants facing higher rents since the Tenant Fee Ban, and many other difficulties in housing have to a large part, tenant groups to blame. Another example of the TFB, limiting deposits to 5 weeks, making it not viable to take a risk on tenants with pets, as an increased deposit cannot be taken. There are many other examples.
The so-called faux housing charity, Shelter are nothing of the sort, they don’t provide food or ‘Shelter’ to anyone, and will readily admit as such. They receive a third of their Annual budget (£20 Million) of tax-payers money from the government to provide housing advice, and take litigation in defence, often of recalcitrant tenants.
In terms of a closing remark of tenants in receipt of benefit ‘demanding’ to view a rental property, an important word needs to be remembered, the PRIVATE rented Sector is called private for a reason. It comprises a large number of single-property owners, many of which may be Blue-collar, key workers owning a family inherited property chosen to be rented out to supplement their low income and to provide a pension safety net. Such people cannot afford to sustain a years worth of rent claimed back in the form of benefit or UC. Neither can they afford to wait for the best part of a year it takes to evict a rent-defaulting or otherwise bad tenant. Tenants who can’t for a number of reasons often of their own making find rental accommodation in the private sector are the responsibility of the state – i.e. Council or Social Housing (not the PRS).
The Private rented sector is by the vast majority working very well with a small number of tenants choosing to ‘play the system’ Such tenants will usually cost a landlord up to and many times more than £10,000 and tend to be repeat ‘offender tenants’
Shelter would do well to know the pragmatics of the private rented sector before criticising, as standing up for the minority is actually disadvantaging the majority.
If you would like to discuss the content of this email or have me as a guest on a programme concerning rented property, please contact me.