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  • LHA/Universal Credit

    Landlord prejudice towards benefits tenants

    I have been trying over the last 2 years to get a 1 bedroom place in either Camden,Balham,Canada Water, Stepney Green, Finsbury Park, Kentish Town, Shepherd's Bush and Acton, but I have noticed something quite alarming, there seems to be a prejudice toward people on Housing Benefit, why is this?

    Is it legal? or morally justified? I ask as I am genuinely perplexed by thos, if anyone of you guys can shed some light on this, I would be really appreciative.

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    Hi Darius,

    The issues with housing benefit tenants are as follows:

    1.  Most lenders have a clause in their terms and conditions that the landlord cannot rent to a tenant in receipt of benefits.

    2.  You cannot get rent guarantee insurance for a tenant in receipt of benefits.

    3.  Housing benefit is paid 4 weeks behind, whereas private sector rents are paid in advance.  This reduces the risk for the landlord.

    4.  Universal Credit is seeing a huge rise in rent arrears as UC tenants fail to pass on the housing benefit element to their landlord.

    This is a related discussion:

    Zoopla to ban phrase "No DSS" in listings

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    This is quite alarming, speaking as an honest man on higher end of the benefit scale (ESA/PIP) due to an ongoing condition, some people are more than willing to make up any discrepancies in the handling of the benefit shortfall (to me personally it's a matter of personal pride I have zero rent arrears and have been in my current property for 10 years with no drama) but are landlords aware they can have the housing benefits payed directly to them? and the shortfall in the benefit/rent ratio is met by the tenant, as I am sure you are all aware. So as regards as the rent being paid 4 weeks in arrears, wouldn't it be down to the landlord and the tenant to work out a satisfactory solution to this 1 month shortfall until the HB is paid and I believe is backdated from the date of the claim. There are tenants who don't want to inconvenience landlords in any wave shape or form? so given that the HB can be paid directly to the landlord directly, isn't that a safer option than say having a working person in a property who could loose there job? Once the 4 weeks (on average it takes the claim to go '"live") all debts would be paid up or at least a workable agreement constructed between the landlord and tenant (and with daily chasing up of the benefit's progress down to the tenant directly this would also open communication between the LL and the Tenant so if any problems do arise in say paperwork/forms etc they can be rectified as quickly as possible to stop hold ups further down the line ) so financially it could work in the landlords favour and keep the tenant in a more relaxed frame of mind? Thus eliminating "fear" in both the landlord and tenant? I mean I am not an expert or anything but isn't a tenant willing to go that extra mile, get off his or her ass to chase up the benefit claim instead of sitting on the sofa watching The Big Bang Theory repeats?
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    Ok, I get that after all you guy's are running a business and not a charity, I understand this and solely agree, but do you landlords not think, there are decent people on benefits who would break there own hearts to ensure everything is paid, for example, as a tenant on Housing benefits, ESA and PIP due to an ongoing illness would ensure all monies that maybe owed on start of the tenancy (and often as not there is) that a legal or even a aural contract is drawn up regarding any arrears, I mean, I can speak for anyone else, but me personally as a tenant, I would ensure all cost/payments etc are met, but even with the rent paid in arrears of 4 weeks (I think that's right, I tend to get a little confused on legal terms, as I am not a landlord or own a property) but all payments are back dated, so yes you may have to wait a month or told for the HB payments to arrive (my current HB payments are paid directly to the landlord, this serves as piece of mind for both the tenant and landlord) and any arrears can be paid additionally to the "top up" at an amount mutually agreed at the start of the tenancy.

    I understand in some cases people on benefits have a "bad reputation" which is both Judgemental and incorrect ( I understand there are a minority that cause landlords a load of bother, anti social behaviour, drug/alcohol abuse and the such ) but this misconceptioncan see that a landlord could miss out on genuine honest tenants merely wanting to improve there situations, but these "rouge elements" can only be "weeded" out by viewings and relying on your first impressions.

    I mean even "working people" can be a nightmare as well, but my current landlord is having a hell of a time with other current tenants in his properties, spending HB payments and the such, this behaviour is rife here in Devon and upon first meeting my landlord some 3 years ago ( I have lived in the property for 10 years) I warned him not to buy the properties because it's a bloody nightmare here, drugs, alcohol and antisocial behaviours on a daily basis, but he went ahead and is now having a nightmare, my point is, there are tenants on benefits that care and are these people not worth considering.

    Insurance can be obtained for people on benefits, I am looking to move to London to seek the various therapies I need which are not available here, so there are tenants that care, but as a tenant who is seeking a place in the cheaper parts of the capital (with a budget of £300 pw approximately) who are good, kind considerate and genuine worth a consideration?

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    Hi Darius,

    You asked for the reasons why, and I gave them to you.

    I agree that there are plenty of tenants in receipt of benefits who are good tenants.  I was just outlining the reasons why HB tenants are often not considered by landlords.  The moral argument is separate to the business reasons.

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    Yes of course, sorry, thank you for the information it will prove very useful, thank you for your consideration in answering my reply, I read an article somewhere where legally this is due to change in favour of the tenants, in your personal opinion do you think this will happen and do you think that's a good idea, again thank you for your consideration in answering my perplexing enquiry.

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    It's a shame Darius but the system the Government has built does not give Landlord confidence. You can get around the issue often by having a Home Owning Working Guarantor.
    This way the landlord is confident they can get an attachment of earnings (cannot get on benefit tenant) or ask courts secure any damages or default on the guarantor's property.

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