You take the risk and I will take the tenant!

If the council want you to house their homeless, then they should pay for the cost of doing so. Where the tenants are “high risk” then the council should expect that the cost will be higher. The way of doing this is either:
1. Individually, i.e. the council acting as rent and damage guarantor for the particular tenant they are referring to the accommodation, or
2. Collectively, i.e. paying a premium rent (Housing Benefit) based on the evidenced costs averaged out across a whole homelessness accommodation project (as is done with supported housing provided by housing associations and charities).

As a not-for-profit supported housing provider, you can see which one I opted for.

The other option for landlords is to simply refuse to take high risk tenants without a suitable guarantor, and stick to those who are lower risk and/or have a guarantor. – I do this for my properties that are not supported housing.

Reply to the comment left by Mark Crooks at 31/10/2020 – 10:14I cannot agree that the landlord’s cost is limited to the market value of the trashed property. You have made no allowance for the legal costs of evicting such a tenant or the loss of rent during the period it takes to evict and then to return the property to a lettable condition, readvertise and install a low-risk tenant. The demands on the landlord’s time also represent a cost, while for some landlords the health toll the whole experience takes in worry and stress alone is sufficient to cause them to leave the sector.

Reply to the comment left by Dutch_Kim at 31/10/2020 – 08:55Problem with £10 K. Kim, is that Pre-Covid, a number of rent arrears cases were up in that figure, but with the manipulation by the Government, which has Doubled the Possession process, Rent Guarantor’s sum would need to be at least Doubled.

Reply to the comment left by Old Mrs Landlord at 31/10/2020 – 12:39
Since posting this I have read David Price’s experience of a tenant who managed to set fire to his property and in the process burned down the two adjoining premises. I must confess such an extreme scenario had not even occurred to me but it certainly illustrates the potentially unlimited damage a tenant might conceivably cause, far beyond the value of the property inhabited by the tenant.

Looks to me that the government are going to treat the PRS for exactly what it is, i.e. a PRIVATE rented sector, following the privatisation ideology where the private sector takes the risk and reward. We are simply in a time of risk, and those who can’t handle the risk need to exit before they are forced to. This virus is going to be around for months, and the economic impact for longer, asset prices and associated yeilds are going to fall, or have already…..this is simply manifesting in arrears, and the public sector aren’t going to/ can’t afford to take that risk….

Reply to the comment left by TrevL at 31/10/2020 – 16:39
Then the public sector are having to accommodate those people, sooner or later.
And under Emergency accommodation standards for much longer and greater cost.
I can see more Councils having to come Cap in hand to offer financial incentives to the private rented sector to try to house their miscreants.

Reply to the comment left by TrevL at 31/10/2020 – 16:39
It’s all very well to say those who can’t handle the risks of letting in current situation should “exit” but how do you suggest we do that when we are unable to evict tenants? Who is going to buy a property with a tenant who can simply stay rent-free for maybe a couple of years? It would mean voluntarily taking on responsibility for all the costs of maintenance and compliance with landlord obligations when, as you say, the likelihood is that the value and yield of the property will fall. No other business is obliged to keep on supplying a product which the customer is not paying for. On the specific subject of this article, i.e. letting to tenants on benefits, landlords are increasingly weighing up the risk and deciding not to take it.

Reply to the comment left by Chris @ Possession Friend at 31/10/2020 – 17:02
“I can see more Councils having to come Cap in hand to offer financial incentives to the private rented sector to try to house their miscreants.”

All I can see is my council tax bill shooting through the roof with empty properties being charged twice or triple normal amount to discourage vacancies. It’s very easy to tax someone with possessions and I fear post-covid recovery will start with US-style real estate tax.

Switching my real estate portfolio to crypto and once I’m done let the socialism prevail!

I would add a further condition that all LC tenant’s rent that is covered by Housing Benefit is paid to the landlord directly from day one.
And is also paid in advance not arrears.

Reply to the comment left by Simon Lever at 01/11/2020 – 03:00
The Govt have designed U.C. the polar opposite to how both private and commercial renting customarily operates.
Then asks why there’s a reluctance to accept tenants on benefit ! ( amongst other reasons )