Pros vs Cons of having UC tenants?

by Readers Question

8:20 AM, 3rd October 2019
About 2 months ago

Pros vs Cons of having UC tenants?

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Pros vs Cons of having UC tenants?

I have never had any tenants claiming Universal Credit before.

However, this time I have had a lot of inquiries from prospective renters on Universal Credit and even some from people who have working guarantors.

What are people’s experiences taking on UC claimants and what are the added risks in readers experience?

Many thanks

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Comments

Rob Crawford

20:02 PM, 3rd October 2019
About 2 months ago

For a start you will find that UC allowance is less than you could obtain if let to professionals, students etc. So to achieve market rate, you would be relying on the tenant to obtain a top-up from some form of employment or council incentive scheme. Alternatively you just have to accept a lower rentaI income. I accept that some UC tenants have just been unfortunate and could be the best tenants, however, I think you will find them to be in the minority, as such you are taking on additional risk of damage, rent areas etc. Your mortgage provider or insurance T&C may either disallow UC tenants or additional terms may be incorporated. UC is paid in arrears (sometime) whereas other sectors pay in advance. In general if you are in a location that attracts professional or student tenants you would be better sticking with those sectors. Whatever type of tenant you consider, make sure they all pass credit, Reference & affordability checks. Applied to all, will insure you against discrimination.

JO CHAPMAN

8:37 AM, 4th October 2019
About 2 months ago

I have had 3 tenants on housing benefit which was paid directly to me, all were happy with this arrangement. When HB changed to UC and it was paid to them, all three kept it, and I did not get another penny in rent from any of them. The application process to apply for direct payment, due to their arrears, was so slow that I had evicted them before receiving any rent payments. Once they are no longer your tenant you cannot apply for arrears to be taken from their UC payments. I may have been unlucky but learnt a valuable lesson and would not entertain accepting another UC tenant.

Paul Shears

9:34 AM, 4th October 2019
About 2 months ago

I would rather have an indefinite void than take a tenant whose ability to pay rent eas dependendent on a government or employer process. It's absolutely out of the question for me. If necessary I would sell the property which would yield absolutely no potential to provide accomodation for these people or come anywhere near a first or second time buyer.

Robert Mellors

10:06 AM, 4th October 2019
About 2 months ago

Although it may be thought that UC tenants are somehow worst than professional tenants, this is not always the case and there are some very good tenants on UC, BUT, there are many who are on UC due to drug, alcohol, mental health, or behavioural problems, or are unable to get a job due to criminal records, or are actually too lazy to get a job. However, do not stereotype everyone on UC as being within these groups, everyone's situation is different, (and there are all these issues within the working population as well). It is very difficult to judge a potential tenant, and say for sure that they are going to look after the property and pay the rent on time, so you need to do as many checks as possible to ensure that you are happy to accept them as tenants.

However, even after you have satisfied yourself that the tenant themselves are suitable, you then have to consider the UC system itself. UC is a disaster for most landlords:
UC is usually paid direct to the tenant, not to the landlord.
UC do not accept correspondence from landlords.
UC do not accept phone calls from landlords.
UC has periods when the tenant won't get any UC, e.g. the initial waiting period, and if they get two lots of wages in a "benefit period" (e.g. paid early due to a bank holiday).
UC often ignore the UC47 (alternative payment arrangement) applications sent in by landlords.
UC misunderstand or mis-apply their own rules, regulations, and guidance.
The complaints process against a UC decision (or maladministration) has multiple levels and can take up to 3 years for a final decision.
Even when a complaint of UC maladministration is upheld, i.e. UC found to have broken the law, in many cases compensation is not being paid to the landlord.

Check out the posts from Caridon Landlord Solutions, and Bill Irving of UC Advice, as they specialise in dealing with UC problems. See also the posts from landlord Mick Roberts who has vast experience of UC claiming tenants (and the comparison with HB claiming tenants).

Mick Roberts

11:29 AM, 4th October 2019
About 2 months ago

Rob has summed it all up, saved me writing it out.
I've loved HB tenants for 22 years, but am no longer taking on any new UC tenants, due to the problems & more what Rob says above.
My current tenants when they do get switched, there is still many negatives, but the positives are:

Positives are tenant currently has top up as her money on same day.
One monthly payment, so easier for them to pay top up on same day as HE, so simpler admin and time saving.
And no explaining to tenants the differences between 4 weekly & monthly.
Housing Element HE the last to be touched when start work or Benefit cap.
When HB stopped, they say Ok Mick leave it with u I'm not getting u what u need.
When UC HE stops, it's normally their UC that has stopped too, so they try & do it all theirselves as IT'S THEIR MONEY THAT IS AFFECTED.
Housing Element HE is the last to be touched so if they have Benefit cap, your HE don't get touched, comes out their money first.
When they start work and HB drops and u try and tell tenant, they say Not my problem. On UC, u receive all your HE unless they earning £1000's. As their own money drops first.
If bank Hol and weekend, everyone gets paid before.
And I also get Top up on same day as HE, not 4 payments through month,

Rennie

11:32 AM, 4th October 2019
About 2 months ago

I have had one property empty for 6 months as I won't take any high risk tenant.

CARIDON LANDLORD SOLUTIONS

14:33 PM, 4th October 2019
About 2 months ago

Reply to the comment left by Robert Mellors at 04/10/2019 - 10:06
Universal Credit is a more complex benefit then Housing Benefit.
Please feel free to give me a call i am happy to offer you free advice to enable you to make an informed decision.

Rob Crawford

19:32 PM, 5th October 2019
About 2 months ago

Need to mention "claw back" policy of UC is miss calculated the council will often go to the landlord and demand repayment from rent paid. This is high risk, particularly as the landlord has no visibility or opportunity to check the tenant's submission.

Jonathan Clarke

21:57 PM, 5th October 2019
About 2 months ago

I`ve been doing LHA for 20 years
They messed that up but got it sorted eventually in 2011 so i stuck with it worked it to my advantage with enhanced strategies and it was all going fine for many years with direct payments and up front deposits and RIA and DHP when needed..... Beautiful
But they have gradually messed it all up with the LHA freeze and HB caps and 37th percentiles and finally the straw which broke the camels back - UC
They needn`t have messed up UC of course - but they did
A spectacular own goal
When no one in authority has the duty or common decency to tell me that my tenant is swapping over from LHA to UC but they do it behind my back and the first i know of it is when i dont get paid something is wrong with that system .
When after 3 yrs of paying me £650 pcm LHA direct they decide to give £650 UC to a recovering alcoholic tenant of mine who goes on a bender and almost kills herself then something is wrong with that system
If only they could be bothered to ask me about that tenant whom I`ve known for 3 years before doing that switch I could of flagged it up as a disaster waiting to happen . I was the most obvious person in the world to ask for a reference - but they actively choose just to ignore me
And no one ever apologises of course
They just make excuses and make the same mistakes again and again and again and again and again and again and again and again and again and again and again

Mick Roberts

12:37 PM, 6th October 2019
About 2 months ago

That's it JC.

UC and Licensing has finally broke my back.

Like u say LHA was awful to start with, and they finally fixed it as recognised the homeless that was coming.

This time the homeless has come, yet to appease the workers, and to keep in power, the political parties not interested in what is really good for the majority and what will work.

Perfect words, why can't they recognise that the Landlord is VERY IMPORTANT in the tenants life and tell us what is happening. They may think Screw the Landlord, this will rattle him taking away direct payment, but we all know, u rattle the Landlord, he packs up or evicts, then it's the tenant that gets the biggest rattle. Then the council homeless section which then gets the BIGGER MASSIVE bill that all could have been avoided. No joined up thinking from/with Govt/Council/Landlord. And we're here with open arms and ears. I'll even cuddle some of these grey suit wearing unhealthy politicians if it gets us talking.

My local job centre initially Jan 2019 time were saying Oh tenant will be fine, they not spend it.
Now 9 months later, they are communicating with me and 3 months ago were saying Why would the tenant tell us they not spend it, but they were lying and have spent it? I said Welcome to the real world, wake up, smell the coffee, we've had all this with LHA as recent as 2008 to 2012, I'm not that old surely?

And now the job centre (only managers at moment) are starting to understand that in fact the tenants may not tell the truth when it comes to direct payment.

Only this week, I've a job centre work coach (dimwit) input a tenants rent at £72 pm. PER MONTH. She din't even realise that the tenant (Don't forget they not the brightest) had told her only the top up rent she was paying.
I had to do a big letter, phone calls, emails, an emergency appointment, for the second advisor to say This is stupid, why did she not realise that that £72pm was ridiculously low. Real rent was £541.66 pm.

I keep saying these job centres have been used to tenant's coming in swearing for 20 years. They now responsible for PEOPLE'S HOMES and they getting it wrong and playing with people's lives. And causing evictions all cause of UC.

That's it, we the most obvious person ever that knows him and they aren't including us in their decision making.

The UC complaints staff are the thickest people on the planet. What does that say for them below them that just answer the phones.

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