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9:29 AM, 22nd July 2020, About 4 years ago 33
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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.
To: womanshour.yourviews@bbc.co.uk
Re – Click here to download the programme
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.
Chris
Possession Friend
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Allan Simpson
8:55 AM, 25th July 2020, About 4 years ago
It’s taken me 12 months to evict a non paying benefit claimant. £5500 in rent arrears. £1600 costs and £12000 to put the property right to rehouse. They then wonder why Landlords and insurance companies don’t want benefit claimants.
landlord247
9:00 AM, 25th July 2020, About 4 years ago
An excellent letter. Shelter (and for the past few years the government and it feels media (BBC)) have done nothing but bash landlords.
The pendulum has already swung too far against the landlord but I fear we will likely get a labour government in the next few years who will push it even further and IF and WHEN that happens. Things will get even worse for both Landlords and Tenants.
For example 'Rent Controls' will force landlords to increase the rent by the maximum amount allowed every year rather than having the choice to maintain them for good tenants. This has been shown to be the effect where it has been tried in the past, making properties even less affordable to rent.
It does feel like every few months there is a new regulation added on that Landlords need to adhere to (legally 'or else'). Which of course make it more and more difficult for new landlords to enter and makes the existing landlords more likely to want to quit the business of providing clean quality affordable accommodation.
moneymanager
10:56 AM, 25th July 2020, About 4 years ago
Reply to the comment left by Beaver at 22/07/2020 - 12:00
"As a landlord you don't have the powers to check whether your tenants are eligible to receive benefits. "
Neither, it would appear, does the DWP!
Chris @ Possession Friend
15:30 PM, 25th July 2020, About 4 years ago
Reply to the comment left by moneymanager at 25/07/2020 - 10:56
I ask for the last 6 months bank statements, BEFORE I'll even submit them for formal Referencing.
Anne Noon
8:07 AM, 28th July 2020, About 4 years ago
I have been a Landlord for 30 years. I have one house where benefit tenants did £15000 of damage to a newly built house. They owed me £10000 of rent , and it took me 7 months to evict. There were £7000 worth of cars on the drive, which the bailiffs said they could not touch. Council would not let me have her new address to pursue, even though they requested a report on her.
On the other hand, my next set of private tenants, properly referenced, likewise trashed the house (£20000 this time, as all the floorboards, underlay, skirtings and carpets and underlay had to be replaced as their dog was allowed to roam freely and pee everywhere) and did a runner in the middle of the night owing £10000 rent. Despite the fact I had their new address and ccjs against them, I received not a penny back. They trashed the second house as well.
Apart from all the other aspects mentioned here, there is also the fact that tenants have to earn 39 times the monthly rental to be allowed to rent a property. This should be strictly adhered and prospective tenants refused without any mention of them being housing benefit recipients.
Whiteskifreak Surrey
8:26 AM, 28th July 2020, About 4 years ago
Reply to the comment left by Anne Noon at 28/07/2020 - 08:07
HI Anne, I am so sorry and truly shocked seeing your story. Unbelievable.
Is there any source for the figure you quote (TTs earning 39 times a monthly rent)? Thank you.
This is more than 3 years. In our part of the world (Surrey) it would not be easy to find tenants gross earning that figure. Of course possible, but they would tend to rent a more expensive properties...
DALE ROBERTS
10:19 AM, 28th July 2020, About 4 years ago
Reply to the comment left by Anne Noon at 28/07/2020 - 08:07
Your experiences and financial losses with tenants equal mine as does your disillusionment with the system. And the losses are exacerbated by the impossibility of recouping the funds irrespective of a CCJ. A CCJ appears to have no effect whatsoever on a rogue tenant. They collect them as trophies to beating the system. I'm owed over GBP25 000 by one tenant who was on benefits and that does not include the 18 months void period we financed whilst awaiting a successful sale. I have one more property to sell before I can finally exit the UK BTL market but present conditions viz. cladding, covid, Brexit and leaseholds are preventing me from doing so. It's a perfect storm! I've learnt to loathe the anti-landlord stance the UK has fostered led from the front by, not only the government but, all the other invidious organisations who protect tenants of the ilk you and I have had to deal with. Add the biased legislation to that and the deliberate indifference to landlords who have scant protection under the guise of keeping people housed no matter the circumstances and it understandable why the relationship between the system and landlords has become so strained. Unless there is accountability for tenants they will continue to feel entitled and untouchable. Evictions have become so costly, cumbersome and complex that landlords such as myself would prefer an empty unit. So I will not offer my last property for rental again. Government and it's rabid henchman aka Shelter have inculcated an attitude of adamantine resistance in this landlord.
psquared
12:17 PM, 30th July 2020, About 4 years ago
I accept that anyone can apply to rent one ofmy propertied but i explain that everyone has to go through referencing regardless of where they get their income. I explain that if they have any ccjs or late payments they need to disclose it before i begin referencing as they risk loosing their holding deposit if anything shows on their report rhat wasn’t declared and resukts im them being rejected.
It really helps to filter out people who wouldn’t pass the checks as they don’t want to risk loosing their deposit. Once i receive their holding deposit i send an email toagai. Temind them to declare anything that might prejusice their application. They have to email me to say they understand that if anything shoes on their credit history that they haven’t declared that is likely to lead to a rejected application they understand their deposit is forefit. I get a lot of people thstchange their minds and don’t go ahead.... better a little nuisance at that stage than much aggro later .
Beaver
12:50 PM, 30th July 2020, About 4 years ago
Reply to the comment left by psquared at 30/07/2020 - 12:17
And do you take social housing tenants with payments made to you direct by the DWP? Or only people who pay you directly?
Mick Roberts
17:19 PM, 2nd August 2020, About 4 years ago
Apologies for my delay Chris, Ive been away.
All great points by u. My biggest problem with UC at the moment & I'm the biggest UC private Landlord in Nottingham, is that UC just won't talk to us. I mean an email contact.
There is no way I am ringing the normal line at an hour queue at a time only to solve nothing by some kid who knows nothing about regulations.
I have some good managers within Job Centre who really don't have to talk to me & if it wasn't for them, there would be more homeless than already is.
The Council in HB CANNOT even talk to UC when UC send a STOP notice to stop a HB claim wrongly. Council HB cannot solve it, they have no one to talk to. It's shocking how UC expect claimant to solve it.
Here's a couple of examples:
My genuine tenant of 15 years getting evicted cause DWP have told local HB office to STOP paying her rent cause UC fraudster in Plymouth stole her identity & we CANNOT tell anyone at UC with common sense about it. UC has said the Fraudster has to ring up.
https://www.landlordzone.co.uk/news/dwp-apologises-to-landlord-over-service-failures-but-takes-two-years-to-investigate-case/
Letting agents cause not allowed to say refusing HB UC, just saying We'll get back to u. So tenants time being wasted cause Govt banning UC refusal where before they at least knew why not.
I'm telling 'em out & out I ain't taking UC tenants any more, it's not them, it's the system I'm not taking. If I can't talk to someone when I know a claim is wrong, what hope is there for the UC. None of mine can move any more. No one is taking them.