New landlord advice

pollyr100

Hi, I am renting my flat out for the first time, as have to move to London for work. I just wondered why landlords were so against DSS tenants?

I have been contacted by a guy (retired due to health reasons and on DSS), looking for a long term rental property. On the face of it he's probably they type of tenant that would suit me, as can provide good references, is unlikely to move out in the near future etc. but wondered if there was a real financial reason that landlords were against it, rather than just a stigma thing?

Any advice welcome,

Cheers.

silvercar

Can he provide a deposit, a guarantor and a month's rent up front?

If he can then he is probably a good bet, provided he understands that he is liable to pay the rent and his claim for HB is a matter for him. As long as he understands that he needs to pay the rent on time every month it should be fine.

Where problems arise is where the tenant expects you to wait for the council to sort out the claim and for you to be paid according to the whim of the council.

paintpot

There are lots of reasons why some landlords shy away from tenants in receipt of benefits.

Firstly, you should check that your mortgage provider and buildings insurer do not prohibit this as some do, or at least with insurers they may increase your premium. Otherwise you are taking a risk.

If your tenant is on benefits then they most likely receive LHA (local housing allowance). The other system is HB (housing benefit). The problem with either is that it is paid in arrears. Thus low income families often can't afford to pay calendar monthly rent in advance. Providing your tenant can and you stipulate that this is a requirement then it may not be a problem.

Also, benefits can be revoked/stopped for all sorts of reasons leaving you with a tenant unable to pay the rent.

Also, some tenants in receipt of benefits can bring other problems with them e.g. nuisance, relationship problems, lack of ability to manage their financial afairs etc. Of course this isn't exclusive to benefits tenants but if they do bring such problems they can be more difficult to remove than tenants who aren't.

Silvercar has given you great advice in respect of getting a guarantor, ideally working and a homeowner, credit check them aswell. You could consider rent guarantee insurance although I am not sure how successful you would be with that for a benefits tenant.

pollyr100

Thanks for the advice.

I'll check with my lender, and insurance company, before going any further then.

He has offered excellent references, and 2 months rent in advance, plus deposit. He is an older, widowed, retired man, and on DSS due to health problems, so I think a lot of the social problems that could come wouldn't necessarily apply, but at guarantor is def a good idea.

In some respects he just seems like a safer bet that some of the students that have shown interest.

paintpot

He does sound like a reasonable prospect as a tenant. Quite unlikely he'll be having all night parties in your property!

I would however suggest that you do credit him though. You don't want to find he has a history of bad credit, debts etc that mean he can't afford to meet his rental commitments on an ongoing basis or has a poor financial management.

Ensure also that you obtain written proof of his benefit entitlements.