Why not pay Housing Benefit directly to Landlords?

Why not pay Housing Benefit directly to Landlords?

14:03 PM, 9th January 2023, About A year ago 22

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Housing Benefit is paid to tenants to cover their housing costs (sorry for stating the obvious). There would be numerous benefits to landlords, tenants, Gov.uk and local authorities if it were paid directly. So why is this not already official policy or on @RishiSunak’s To Do list?

How would it work?
A tenant who is entitled to Housing Benefit already has Benefit Decision Notice showing the amount. The Landlord receives a copy of this as part of Tenant vetting.
Tenant agrees the contract with the landlord.
Tenant and landlord forward a copy of the contract to the LA and landlord completes online application. Done!

At the end of the tenancy, both the tenant and landlord will be legally obliged to notify the LA to end the rent. HB is paid in arrears so there is at least a month to arrange this at the end of the tenancy.

Here are the benefits:

1 To landlords: local authorities will inevitably be better payers than a low-income individual.
2 To Gov.uk: Although the Local Housing Allowances are below market rents, security of payment would encourage many landlords to forgo the extra rent in return for payment security. Result: LHAs can remain low without affecting the availability of affordable housing.
3 To local authorities: Agreeing to pay landlords directly would give an immediate boost to the availability of affordable local housing and reduce evictions which are one of LA’s biggest headaches.
4 To tenants: Dramatic reduction in the number of evictions due to rent arrears and a significant improvement in the supply of accommodation, which in turn will affect rents.
5 To Court system: Instead of CC and High Courts choked with possession and debt cases from tenants who receive HB but use it for other things, the Courts could focus the much small number of cases of genuine need.
6 To benefits fraud: This would also put an end to the fraudster tenants who pocket the HB and spend it on other stuff while paying no rent – it’s illegal and should be prevented at source, rather than taking landlords 6-12 months, £1,000s and months of stress to get them evicted.

I genuinely cannot figure out a downside (except for the low-lifes mentioned in 6). Have I missed something?

Surely Gov.uk, Local Authorities, Shelter and Landlords can unite on this to make the system better for all those on benefits and receiving HB?

London Landlord

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19:19 PM, 9th January 2023, About A year ago

I am currently in this situation right now. Tenant has used the housing benefit payment for other things and is now behind with their rent. I contacted the housing benefit department directly and am now in receipt of their housing benefit as they are more than 2 months in arrears. Issued section 21 as am sick of excuse after excuse. Having direct payments could have alleviated me issuing section 21 and actioning a possible eviction.

Reluctant Landlord

9:34 AM, 10th January 2023, About A year ago

Reply to the comment left by Loggolad at 09/01/2023 - 19:19of course - this makes total sense...which is why the government don't listen.
Dont be fooled either into thinking direct payments (HB or UC) mean they ALWAYS get paid to the LL.

In the case when these are agreed and set up by the DWP they have to put a review date on the claimant record. It has been known in some cases of mine (where the tenant is vulnerable and they themselves insisted on direct payment to LL) that upon review date, a bod at UC clicks a button after making a decision to then pay the tenant despite the tenant even being aware (LL never contacted as we have nothing to do with the claim)!
Of course you know what happens next.... but of course you are not aware of any of this until a month after due to getting paid a months in arrears...

Doug Ellison

10:25 AM, 10th January 2023, About A year ago

You’ve missed one major benefit of direct payments which is increased tax income for the Treasury.At present the main beneficiary of payments to the tenant is often the local off licence or drug dealer.
Direct Landlord payments would,in some cases dramatically increase Landlords income and therefore tax to the benefit of the country in general.An easy way to increase tax revenue without upsetting the general voters.
Too obvious for our right honourable gentlemen in Westminster unfortunately

Chris Bradley

10:28 AM, 10th January 2023, About A year ago

When we rented property in the 1990's the housing benefit came direct to us as landlords and the tenant paid a top up as there was an additional room in the property. Worked great, even when we had a tenant that trashed the house we still got the rent. We used to only have benefit tenants at that time.
Then "tenants" wanted more control over their finances and "shelter" pushed for this current policy emerged.
Now although we do not exclude benefit claimants, they do not pass score as highly on the application process

John MacAlevey

10:44 AM, 10th January 2023, About A year ago

Ten years ago my local authority used their phrase; `you must treat them as if they are in full time work`
`you` is me the owners agent/landlord.
`they` are the full HB tenants
The LA were trying to instill financial responsibility by having the HB go directly to the claimant not the L/L.
This dream-like aspiration still does not work the way they envisaged & HB tenants are the worst at budgeting & cost agents & landlords hours & days of chasing their rightful payments.

Alistair Cooper

10:48 AM, 10th January 2023, About A year ago

In the ‘good old days’ HB was in most cases always paid direct and in cases where there were arrears the Local Authorities were obliged to pay direct. The vast majority of Landlord caution towards taking on HB assisted tenants & the vast majority of arrears are now directly caused by this misguided policy.
The ‘idea’ was that by paying tenants they would become more responsible with their own finances & start to budget like monthly paid employees. The evidence is completely opposite.
It gives a window of opportunity to the wreckless to be more so.
Even the most good intentioned and sensible benefit recipient is going to face a big dilemma when a £5k cheque finally arrives from the DWP (now that most are on UCredit) after they’ve finally processed a claim after 6+ months , passing the whole amount on to their landlord and letting the emergency credit on their £200/week PAYG meter run out ???
The fact that the DWP are far worse than even the worst local authorities in administering the system and simply will not cooperate or communicate with ‘evil’ landlords and the fact that benefits have simply not been updated to anywhere near real rent levels in most areas directly leads to the current arrears mess and does nothing to support tenants genuinely in need of quality accommodation that the state has systematically over the decades failed to provide.
I used to provide 15-20 quality units of accommodation to be befit recipients ; I now provide none and suspect I am not alone
The choice for the country is clear - support landlords to provide housing or get on with the task and do it in the public sector - currently the UK does neither

John Dace

12:05 PM, 10th January 2023, About A year ago

HB and UC claimants never seem to score highly enough on my vetting criteria for many of these reasons. But a big one - often overlooked - is even if rent if paid direct to landlord - they can claw it back if they decide the tenant has done something voiding the claim. This could be working or a boyfriend staying etc which we landlords would know nothing about. This could mean a clawback of months / years of HB. Its no good saying - ‘sorry that money was for rent’ or ‘I didnt know anything about that’. They will demand it back from you and tell you to sue tenant!

alan thomas

12:41 PM, 10th January 2023, About A year ago

It is my understanding that if a landlord receives housing benefit directly and it is later discovered that the claimant was not entitled to receive the benefit then the landlord will have to return all of the money paid.
This would be for rent paid that could run into years.

Kate Mellor

13:22 PM, 10th January 2023, About A year ago

Reply to the comment left by alan thomas at 10/01/2023 - 12:41
Actually the tenant is liable to repay as they were the beneficiary. The landlord can only be demanded to repay in situations where they failed to report the fraud if they were aware of it.
I know that some councils will automatically reclaim from landlords but it should be challenged. Our council sticks to the law and we have not had rent clawed back despite receiving direct payments from a tenant who had been fraudulently claiming.

juliet bonnet

13:22 PM, 10th January 2023, About A year ago

Reply to the comment left by DSR at 10/01/2023 - 09:34
However I am not the only landlord who has had to return the rent paid directly to me by the council, because 'the tenant's circumstances have changed' and the DWP can make the landlord liable for some years after the tenant has moved out! Stock answer is reclaim it from the tenant...as if!🤯

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