No job + no guarantor = No Home and Crisis wonder why?Make Text Bigger
According to the housing Charity “Crisis” only 1.5% of private landlords across the UK are willing to rent to benefit claimants aged under 35.
Changes in benefit rules have meant that single people under the age of 35 can now only claim benefits which are sufficient to rent a room in a shared house. With increased demand though, Private Landlords are in a much better position to “cherry pick” their tenants in order to minimise risks and maximise returns.
The risks of renting to benefits tenants are three-fold and are set to increase:-
1) Housing benefits are paid directly to tenants, not private landlords. If a tenant chooses to misappropriate those benefit funds and spend the benefits on something other than the rent, that’s not a crime. Many landlords argue this should be treated as fraud but the authorities do not see it this way and believe that the recovery of unpaid rent should be dealt with via the courts. However, it stands to reason that if a person is claiming benefits they do not have the ability to pay even if a private landlord wins a case in court. The costs of pursuing rent are prohibitive and the minimal chances of recovery make the use of the legal system to recover debts futile.
2) If housing benefits are misappropriated and a tenant falls into arrears a private landlord currently has to wait at least two months before applying to have housing benefits paid directly to him. No such rules apply to Registered social Landlords at the moment, however, they too are going to become caught with a similar and much larger problem later this year called “Universal Credit”. When this kicks, the plan is to pay no benefits to landlords, whether they are private landlords, councils, housing association or charities.
3) No landlord can apply for possession until a tenant is two months in arrears. Technically a landlord can then serve a section 8 notice requesting a tenant to move out. However, once the two weeks is up, if the tenant does not move out no crime is considered to have been committed. The landlord then needs to apply to Court and that’s when the delay tactics and false defences begin to occur. Most private landlords have completely lost faith in this system based on experiences of the processes taking six month or more to recover possession. Therefore, they have been serving section 21 notices to gain possession which technically can not be challenged as the law allows the landlord to request possession of his property on this basis without having to prove a reason. The tenant is still not compelled to leave though and by the time this notice has expired could now be four months in arrears. To add insult to injury, the tenant is still not compelled to leave the property and continues to break no laws whatsoever if he chooses to stay there, even if he’s still not paying rent! Try getting away with that in a guest house or hotel. The only way a landlord can gain possession is to get a Court order and instruct bailiffs. This can very easily take another few months, sometimes longer.
Can you see now why private landlords don’t want to take the risk of letting to tenants claiming benefits unless those tenants have a financially sound guarantor who is worth litigating against if things do go wrong? I haven’t even touched upon anti social behaviour of tenants or damage to property. You’d be forgiven for believing that the Police would take more of an interest in those two things wouldn’t you? Think again!
The long and short of the matter is that there is a massive under supply of property. Private landlords are business people and like all business people they simply want to minimise their risks. Therefore, it stands to reason that they will let their properties to the lowest risk tenants they can find and for as much as they can charge. That’s business!
No shopkeeper is going to leave his door unlocked at night so that hungry people can take food. No bank is going to leave it branches open with no security and the safe wide open so that poor people can help themselves to money. Why, therefore, should private landlords to be expected to have a social conscience and allow people to live in their properties without paying for them.
Oh, by the way, the Registered Social Landlords and Councils are also turning their backs of housing benefits claimants too. There is a growing trend for these organisations to provide properties only to working families too. They are not really known for building shared accommodation. These organisation are often Charities, if any group should have a social conscience, should it not be them?
Is all of this right and will things change?
Written on Christmas morning whilst my family are getting ready to go to visit friends.
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