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  • LHA/Universal Credit

    Landlords welcome planned changes to UC

    As part of my day job I worked in assisted and supported living units. Budgets and spaces are limited and the tenants needs are carefully assessed. I can envisage many in need of support being allocated accommodation in the PRS where their rent is paid directly to the landlord. This is not the same a supported living.

    I'm not a planning expert, but what is being suggested may be very close to a material change of use from C3 to C2. I don't think direct payment of rent itself is sufficient, but what if the rent also includes utilities? Add to that a well intentioned landlord who pops around once or twice a week to make sure their tenant is ok and it starts to sound more like a supported living unit which will require C2 usage and an annual CQC assessment.

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    There is no planning or COU issue here - red herring!

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    Andrew McCausland

    Hamilton Square Estates Ltd

    Wirral Property Group Ltd

    Sourcing and renovating investment property since 1994

    There is a planning issue here, but currently it is only for those that provide supported and assisted living units. With my, admittedly limited, knowledge of planning I would expect to have great difficult in combining my roles of support worker and landlord in a C3 property. I can be either but not both and would most likely require C2. This report details the planning considerations:

    https://www.housinglin.org.uk/_assets/Re...lasses.pdf

    Where care is defined as:

    Personal care for people in need of such care by reason of old age, disablement, past or present dependence on alcohol or past or present mental disorder

    I'm just one small landlord sharing some unpopular opinions but its a very fine line from having rent paid directly to providing a basic element of care.

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    The way i see it I guess is that LHA is taxpayers money so the taxpayer should much greater say than the tenant recipient

    If they earnt it then maybe more involvement - but its just not their money

    I believe the taxpayer  would want it to go to me rather than be involved in a  yet another failed social experiment

    Pre 2010 we had this all before . It doesnt work.

    But the government forces them to take the money

    Why give an alcoholic money to spend on rent when you know they will spend it on drink

    I believe that goes against the taxpayers wishes , my wishes and the tenant wishes

    The PAYE deductions are different yes but in what way exactly  ?

    Its all about trust . If 100% of people were trustworthy no problem

    But many people will always lie ,cheat  and even if they dont they delay paying when money is tight

    Yes you could have a system where mortgage payments are deducted.

    I wouldnt have a problem with that if the lender insisted on it . Fair dos i would say

    Its a significant sum so please take it direct if you dont trust me .

    I know i will pay it  - but of course you dont know that so I respect that

    I pay for many things up front to instil confidence . A holiday , a car , a house

    Maybe a hybrid system. You can borrow 20K more if you agree to have it deducted directly .

    After all they may have a 75% interest in the property so ofc ousre they are anxiuos i may not pay it

    Having said that I would be a homeowner and they know where i am  . They would just repossess and so dont lose out

    A LHA tenant though  can just walk away and lose absolutely nothing  and recovery is so much harder .

    They havent got any money to recover and the £1.36 pcm which is what I was offered by a court once is next to useless.

    The causes are well identified already . There is nothing new here

    Some people just dont hand rent over for all manner of reasons.

    History shows us that . Thats why the 2010 HB regs came in to make it direct to me after years of abuse

    UC has reversed that decision and there is mayhem once more and rent arrears mount up again

    History repeats itself because governments have short memories

    Or you get the likes of IDS who wrongly thinks he has new answers

    He didnt , which is one of the reasons UC fails.

    IDS is a theorist . The theory is fantastic I don`t disagree

    Practical implementation  was woeful

    I have many great theoretical ideas which i `know` will work

    But in practice the hurdles often mount up and i have to think again

    Why - Because in practice people think and act differently to me

    IDS didnt understand that - either because he didnt ask or his ego ignored the obvious

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    Jonathan Clarke. http://www.buytoletmk.com


    We can apply to the Council or UC for direct payments under the safeguarding regulations.  My concern is that this is only effective once you can prove 8 weeks or 2 months rent arrears.  By that stage it is too late and the LL is starting the eviction process.  Also, why should the tenant keep that 8 weeks rent?  It was given to them to cover their housing costs and they, either deliberately or by mis-management, have spent it on something else.  The safeguarding system is too slow to react and often fails to register the arrears in time meaning payments continue to the tenant, making things worse.

    I am not stigmatising all benefits tenants.  I have many tenants on a raft of different benefits and the majority manage things well.  My concern is with the significant minority who do not manage well.  Many of these people are in what the agencies term the "hard to reach" group.  They are often already having numerous interventions by a number of agencies in an effort to turn their lives around.  Going into rent arrears and getting evicted is no help to them.  Once they get evicted they often move and end up in another Council area meaning a new intervention team having to pick them up and start the process all over again.

    There is a mechanism to ask for safeguarding before the 8 week point, for reasons like alcoholism or drug use.  When this was managed by the local Council's the staff often knew the people involved, or the problem was highlighted on their file, and were able to then pay the LL without a delay.  Now, with much tighter GDPR regulations these markers have been removed and the UC people have no contact with the claimants.  This means that we, as taxpayers, pay rent to people who we know will not use it to pay their rent.  They end up getting evicted, which is no problem if they are single (if you don't mind an increase in rough sleeping, which I do).  However, if there are children involved the LA end up putting them up in emergency accomodation at enormous cost to the local taxpayer.

    I have been working in the housing industry for 25 years and worked with many benefits claimants and homelessness organisations.  As a business, and part of my social contract with our community, I keep a number of flats available just for hard to house cases; care leavers, rough sleepers, people with substance abuse history.  I lose money on these flats but accept it is something I want to do.  It is an unfortunate fact that interventions don't work in many of these cases.  Making this group of people into homeless debtors is not helping them.

    All to what end?  Why don't we pay the total rent due directly to the end user, the agent / LL?  Paying all rent direct will avoid stigmatising the minority by labelling them debtors / drug users / alcoholics.  It will reduce arrears and allow LL to invest in their property again. 

    Generation Rent complain about high rent levels, with much justification in many parts of the country.  Making housing benefit payments to dodgy tenants puts the rent up for everyone as LL have to cover their losses elsewhere.  It isn't rocket science to understand this.

    I come back to my original point:  direct payment to LL is an easy win for Amber Rudd and one that will win her many friends and few enemies.

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    Andrew McCausland

    Hamilton Square Estates Ltd

    Wirral Property Group Ltd

    Sourcing and renovating investment property since 1994


    Thank you for your detailed response. I've been letting to a similar demographic for around 10 years, not as tenants, but as lodgers. I've always trusted my gut feel in finding people that have made a poor choice in life and are trying to find a way to overcome it. Most have been successful and I believe a large part of that success was in taking responsibility for themselves as well as a change in environment.

    Your first and final statement:

    I come back to my original point:  direct payment to LL is an easy win for Amber Rudd and one that will win her many friends and few enemies.

    I agree with your statement but I don't believe its the right thing to do. I am also not saying that you shouldn't be able to choose to do this, but that I wouldn't choose this.

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    Responding to a report published by Citizens Advice today showing 49 per cent of those it helps with Universal Credit are in arrears on their housing payments, Chris Town, Vice Chair of the Residential Landlords Association:         

    “Today’s report demonstrates the need for more changes to be made to Universal Credit.

    “One of the main drivers of rent arrears has been that tenants cannot routinely choose to have the housing element of Universal Credit paid directly to their landlord at the start of a claim. Many tenants prefer to have the assurance that their rent is paid and their right to do this should be introduced immediately.

    “This needs to be coupled with lifting the freeze on housing benefits and the housing element of Universal Credit. Housing cost support is simply not keeping up with the realities of rents in the private sector, despite them falling in real terms over the past year.”

    The RLA’s most recent research shows that of those landlords with tenants on Universal Credit, 61 per cent experienced them going into rent arrears in the past 12 months. This is up from 38% last year and 27% in 2016.

    A report for the RLA by experts at Manchester Metropolitan University noted that caps on the Local Housing Allowance Rate have been a key driver of homelessness from the private rented sector.

    ​The Office for National Statistics shows that in the UK, average rents in the private sector increased by 1 per cent in the year December 2018, much lower than inflation.

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