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  • Property-a-holics

    LHA Landlords ... Are you worried about the Universal Credit ... ?

    According to this blog, the Government is going to introduce Universal Credits from 2013.This means, in a nutshell, that there will be one benefits payment made that includes housing benefit, and the claimant will need to pass it on to the Landlord.I think this is going to cause chaos for LHA Landlords.  What do you think?If Universal Credit becomes a reality, will you withdraw from the LHA market?Blog courtesy of LRS Referencing.
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    Universal credit will happen. I am doing a lot of work with my West Midlands local authorities to ensure that it does not have a huge negative impact on the supply of homes to those on benefits.

    The best solution I have found - I would be very interested in any other ideas - is to insist that your new LHA tenants open a Credit Union Account into which their UC will be paid. Then they must set up a DD for the rent payment. I am working closely with CU's so that the account is administered in a landlord friendly way.

    • Money can only be withdrawn from the account so long as there is sufficient to make the DD rent payment
    • If a tenant cancels the DD, which they can, the landlord as recipient will be notified at once and the tenant will need to give one months notice
    • If the tenant sets up a new DD to another landlord the first landlord will be notified at once but again there will be a one month notice period before they can stop the first landlords payment

    There are other details to be agreed but this is what I have in place so far. There will be a charge of around £4-5 a month payable by the landlord

    One of the aims of a Credit Union is financial inclusion, they are given public funding to achieve this and that is why they have been more than willing to work with me.

    There will be some extra work for landlords – good practice is to go with the prospective tenant and help him to open the account under the right terms. There will also be benefits

    • The tenant will not be able to include the rent in their other budgeting activities
    • The local authority will not be able to reclaim any overpayments from the landlord because he is not getting direct payment
    • The landlord will know when a tenant is planning pop off without notice
    • The landlord will have early warning if the tenant stops payment – one month

    There are Credit Unions all over the country.  Don’t wait for the universal credit to happen, get you tenants signed up now.

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    Follow me on Twitter @landlordtweets

    For those landlord who let in my area this may be helpful.  If you need any further help please post ot better still come and talk to me at the West Midlands meet on 23rd September - see Event posted by Pat flatley.

    Credit Union name

    Area covered

    Contact details

    Scheme operational

    Cost to Landlord

    Credit Union wants to promote scheme


    Birmingham Credit Union (North)

    North Birmingham inc Sutton coldfield, Chelmsley wood & Erdington

    Hilary

    0121 350 8883

    YES

    £5 per monthly transaction

    YES


    Birmingham Credit Union (South)

    South Birmingham inc Edgbaston, Harborne & Kings Norton

    Sonia

    0121 486 2035

    Sonia@communisave.co.uk

    YES

    £5 per monthly transaction

    YES


    Black Pear credit union

    Worcester, Bromsgrove, Kidderminster, Evesham, Redditch

    Credit Union ceased trading

     

     

     


    Citysave credit union

    Birmingham

    0121 303 4013

    NO

    N/A

    NO


    Castle and Crystal credit union

    Dudley borough

    01384 815771

    YES

    £10 per monthly transaction on the 15th of each month

    YES


    Coventry West credit union

    Coventry & Warwickshire

    02476

    YES

    £5 per monthly transaction

    YES


    Fusion credit union

    Lichfield district

    01543 415032

     

    YES only to 1 landlord

    No cost but considering a fee

    YES


    Fairshare credit union

    Telford & Wrekin, Broseley,Much Wenlock

    01952 282 528

    John.harrow@fairshare.uk.com

     

     

     


    Just credit union

    Shropshire

    01743 252325

    info@justcreditunion.org

     

    Considering offering scheme

     


    Ladywood credit union

    Ladywood

    0121 454 0534

    YES

    £5 per monthly transaction

    YES


    Money box credit union

    Herefordshire

    0845 347 9399

     

     

     


    Nuneaton credit union

    Nuneaton borough

     

     

    Considering offering scheme

     


    Rugby credit union

    Rugby borough

     

     

    Considering offering scheme

     


    Staffordshire credit union

    Staffordshire

    0845 224 1215

     

     

     


    South Warwickshire credit union

    Startford upon avon, Studley, Warwick, Leamington

     

    YES

    £5 per monthly transaction

    YES


    Six towns credit union

    Sandwell area

    0121 553 3110

    Angela.ledbury@sixtowns.co.uk

    YES

    £5 per monthly transaction

    YES


    Tamworth credit union

    Tamworth borough

    01827 65062

     

     

     


    Walsave  credit union

    Walsall borough

    01922 653 310

    Sarah

    YES

    £2 per transaction – Tenant charged

    YES

    Already 1500 on scheme


    Wolf credit union

    Wolverhampton

    01902 572 340

     

     

     



     

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    Follow me on Twitter @landlordtweets

    Hi Mary

     

    LHA is not my market but it's a brilliant piece of advice and insight for anybody who is.  It would make a great blog post which may well be picked up by the National Press.  I look forward to hearing more about it at the inaugural meeting for The West Midlands Property Tribe.

    Regards

    Mark Alexander

    Founder of Property118.comLatest headlines below:

     

    Property118.com

     

    MARY LATHAM said:

    For those landlord who let in my area this may be helpful.  If you need any further help please post ot better still come and talk to me at the West Midlands meet on 23rd September - see Event posted by Pat flatley.

    Credit Union name

    Area covered

    Contact details

    Scheme operational

    Cost to Landlord

    Credit Union wants to promote scheme


    Birmingham Credit Union (North)

    North Birmingham inc Sutton coldfield, Chelmsley wood & Erdington

    Hilary

    0121 350 8883

    YES

    £5 per monthly transaction

    YES


    Birmingham Credit Union (South)

    South Birmingham inc Edgbaston, Harborne & Kings Norton

    Sonia

    0121 486 2035

    Sonia@communisave.co.uk

    YES

    £5 per monthly transaction

    YES


    Black Pear credit union

    Worcester, Bromsgrove, Kidderminster, Evesham, Redditch

    Credit Union ceased trading

     

     

     


    Citysave credit union

    Birmingham

    0121 303 4013

    NO

    N/A

    NO


    Castle and Crystal credit union

    Dudley borough

    01384 815771

    YES

    £10 per monthly transaction on the 15th of each month

    YES


    Coventry West credit union

    Coventry & Warwickshire

    02476

    YES

    £5 per monthly transaction

    YES


    Fusion credit union

    Lichfield district

    01543 415032

     

    YES only to 1 landlord

    No cost but considering a fee

    YES


    Fairshare credit union

    Telford & Wrekin, Broseley,Much Wenlock

    01952 282 528

    John.harrow@fairshare.uk.com

     

     

     


    Just credit union

    Shropshire

    01743 252325

    info@justcreditunion.org

     

    Considering offering scheme

     


    Ladywood credit union

    Ladywood

    0121 454 0534

    YES

    £5 per monthly transaction

    YES


    Money box credit union

    Herefordshire

    0845 347 9399

     

     

     


    Nuneaton credit union

    Nuneaton borough

     

     

    Considering offering scheme

     


    Rugby credit union

    Rugby borough

     

     

    Considering offering scheme

     


    Staffordshire credit union

    Staffordshire

    0845 224 1215

     

     

     


    South Warwickshire credit union

    Startford upon avon, Studley, Warwick, Leamington

     

    YES

    £5 per monthly transaction

    YES


    Six towns credit union

    Sandwell area

    0121 553 3110

    Angela.ledbury@sixtowns.co.uk

    YES

    £5 per monthly transaction

    YES


    Tamworth credit union

    Tamworth borough

    01827 65062

     

     

     


    Walsave  credit union

    Walsall borough

    01922 653 310

    Sarah

    YES

    £2 per transaction – Tenant charged

    YES

    Already 1500 on scheme


    Wolf credit union

    Wolverhampton

    01902 572 340

     

     

     



     

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    Regards


    Mark Alexander - Property118.com
    Twitter: @iAmALandlord

    Mark You may not target tenants who are on LHA but many people are just one pay cheque away from loosing their job. EVERY landlord needs to know and understand the LHA system and have a strategy in place that ensures that he gets the rent. 4 years ago I would sit smugly when landlords talked about all their many problems with LHA tenants - rent arrears being the major one. I now have two tenants on LHA and last year five of my tenants were on LHA. Job loss, relationship breakdown, ill health can all contribute to the possibility of any tenant needing to ask for state help. Like any "insurance" it may be a waste of time but when you need the information and your tenant has had his head stuck in the sand until you chase for the rent – you will be very glad that you are well prepared.  Trust me it happened to me!.

    This is one of the subjects I plan to talk about on 23rd September, at the West Midlands meet. I will offer solutions to some of the problems that landlord suffer from the benefit system and I really hope that some tribes people who have far more experience than I have in this market will be there to add their hints and tips too.

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    Follow me on Twitter @landlordtweets
    That's a very good point Mary.  I probably wouldn't know if my tenants had lost their jobs until the rent stopped being paid.  You're right, I would not be prepared for dealing with LHA problems.  I will on sept 24th though SmileMARY LATHAM said:

    Mark You may not target tenants who are on LHA but many people are just one pay cheque away from loosing their job. EVERY landlord needs to know and understand the LHA system and have a strategy in place that ensures that he gets the rent. 4 years ago I would sit smugly when landlords talked about all their many problems with LHA tenants - rent arrears being the major one. I now have two tenants on LHA and last year five of my tenants were on LHA. Job loss, relationship breakdown, ill health can all contribute to the possibility of any tenant needing to ask for state help. Like any "insurance" it may be a waste of time but when you need the information and your tenant has had his head stuck in the sand until you chase for the rent – you will be very glad that you are well prepared.  Trust me it happened to me!.

    This is one of the subjects I plan to talk about on 23rd September, at the West Midlands meet. I will offer solutions to some of the problems that landlord suffer from the benefit system and I really hope that some tribes people who have far more experience than I have in this market will be there to add their hints and tips too.

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    Regards


    Mark Alexander - Property118.com
    Twitter: @iAmALandlord

    Hi Vanessa,

     

    The answer is yes.I'm trying to be positive about it,and when they said direct payment would be taken away back in April 2008, the reality was that you could still get direct payment if the tenant was classified as vulnerable.

     

    I'm sure that the new system will have to cater for vulnerable tenants.At present I only house vulnerable people because to do otherwise is asking for trouble.

     

    From the article you quoted, it looks like it is in the early stages and I would think many changes will be required.

     

    It is all very worrying though, and I don't have complete confidence in the Credit Union as the Council have not always paid them as requested, but instead sent out cheques to the tenant causing financial loss.I complained to the Government Ombudsman and they decided in favour of the Council because the Council had not made an undertaking to pay it to the Credit Union.

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    Bill this is why it is so important to work with both the CU and the local authority. Under the universal credit system all the financial benefits provided to a person to assist with their living expenses would be combined into a single capped payment and the Housing Benefit dapartment would no longer be needed. If a payment was not made the tenant may be without food or fuel and therefore the system would need to have safeguards built in. bill morgan said:

    Hi Vanessa,

     

    The answer is yes.I'm trying to be positive about it,and when they said direct payment would be taken away back in April 2008, the reality was that you could still get direct payment if the tenant was classified as vulnerable.

     

    I'm sure that the new system will have to cater for vulnerable tenants.At present I only house vulnerable people because to do otherwise is asking for trouble.

     

    From the article you quoted, it looks like it is in the early stages and I would think many changes will be required.

     

    It is all very worrying though, and I don't have complete confidence in the Credit Union as the Council have not always paid them as requested, but instead sent out cheques to the tenant causing financial loss.I complained to the Government Ombudsman and they decided in favour of the Council because the Council had not made an undertaking to pay it to the Credit Union.

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    Follow me on Twitter @landlordtweets

    Nick I agree with your thinking but balance that against the predicted increase in demand for property from the PRS to fill the black hole in social housing - do you think that may soften the blow?

    What is your opinion of the possible solution of credit unions Nick?

    The link you gave to your post on another thread did not work for me?Nick Parkin said:

    This is EXACTLY what I was referring to in my post in this Tribes discussion.

    As Mary says - this WILL happen, and it's objective is to reduce the Welfare bill, and in particular how much the government pays for social housing. I don't know whether the government has some secret calculations as to how much rents will fall - it wouldn't surprise me if in some areas landlords incomes halve - I'm not suggesting that rents will halve, just that bad debts, and collection costs will rise dramatically.

     

    This won't just be an LHA issue, there is only 1 PRS and everything that happens at the LHA end of it influences the rest of the chain right up to Mayfair. If I were to try to put numbers on things I would guess that the extreme reduction of LHA type rentals could be as high as 50% therefore the most likely figure is 25%. I would guess that the non LHA part of the PRS would be influenced to about 50% of the LHA change, so I would expect to see general rents fall by 12.5% over the next 3 years. I'm guessing, but that's what I am going to plan for.

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    Follow me on Twitter @landlordtweets

    Hi Vanessa,

     

    In places like Bristol it would be easy not to bother with LHA.In Weston Super Mare it would be much more difficult because there are few major employers.

     

    It would be interesting to hear what John Paul says about this.

     

    It is very tiresome when the housing benefit rules keep changing

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