Can a landlord not let to someone on housing benefit if property has mortgage?

lauranurse

I have found the perfect house, but when I phoned the estate agent to ask for a viewing and said I would be on housing benefit, they told me that they couldnt let it to someone on housing benefit (or to students) because it has a mortgage on it.

Is this right? Or have they made this up because they just dont want to let it to someone who isnt working?

I said I would pay the deposit as another reason they gave was something to do with a bond for the deposit not being acceptable, but they still werent interested.

My mother is willing to be guarantor if they would accept this - is this likely and how would I go about it?

Thank-you for helping me

nikki_angel

We wasn't allowed to let to HB receipients. Totally stupid in my opinion as the rent is more or less guarenteed. Our lender decided, not us.

BitterAndTwisted

Anyone with a mortgage requires their lender's approval. Who they choose to let to is their own business and an awful lot of landlords see those on LHA as at high-risk of getting into arrears.

If your mother is willing to be a guarantor and she understands all of the risks she might be taking (your LHA being cancelled or suspended and her having to make up the shortfall for the entire length of the tenancy even if you are in the property for years) then most landlords would find this acceptable.

Please don't forget that LHA is paid in arrears but your rent needs to be paid in advance to the landlord, so once you do start working you will have need of savings to bridge the gap until you get paid.

mossymoss

I am a landlord and our letting agent advised us not to accept people on housing benefit however one of my tenants lost her job halfway through the tenancy and therefore had to claim housing benefit so we had no choice! I have never heard of this at all, however my landlords insurance will only cover me if the person who is renting has passed referencing (with a job etc) or alternatively if a guarantoor is used and they pass referencing. My Buy to Let Mortgage doesnt say anything about not letting to people on housing benefit. I would be willing to accept a tenant but only if they had a guarantor, as you do. Try another agent! And good luck finding a property :0)

lauranurse

Thank-you, very helpful replies.

So would I need to specifically say about the guarantor, as the letting agent didnt suggest this when I asked her if there was a way around it?

Do you think they would treat me differently if I explained why I am unemployed - long term sickness/disability rather than just not having a job, or wouldnt it make any difference?

I feel a bit inferior that I cant just rent somewhere I like, like people who arent working are not as good somehow? Maybe Im just being sensitive!

nikki_angel

I don't think it will make a difference as it will be the lender calling the shots and not the agent but it's worth a try! Good luck x

G_M

Some BTL mortgage lenders DO make it a condition that the landlord doesn't rent to claimants. As said above, if a tenant moves from emplyment to benefit partway through a tenancy, not much anyone can do.

Not all lenders stipulate this. But then some LLs also have a preference for working tenants.

Offering a guarantor (or 6 months rent upfront) might persuade a LL, but will not change a lender's policy.

mossymoss

The Buy To Let company I am with is a major buy to let provider so if some companies do stipulate it, shop around with different Landlords and it wont be long before you come across one who is able to accept you. It would be worth giving the letting agent a call and explaining your situation and seeing if there are any other Landlords who are able to accept you on their books?

BitterAndTwisted

lauranurse wrote: »

Thank-you, very helpful replies.

So would I need to specifically say about the guarantor, as the letting agent didn't suggest this when I asked her if there was a way around it? Yes, you should but not this particular agent as they don't deserve your business after showing so little interest.

Do you think they would treat me differently if I explained why I am unemployed - long term sickness/disability rather than just not having a job, or wouldnt it make any difference? No, I don't think they would. No wage equals no wage

I feel a bit inferior that I cant just rent somewhere I like, like people who aren't working are not as good somehow? Maybe Im just being sensitive!

It's not that you are inferior, it's your circumstances which are in the eyes of agents and landlords. People not on a regular earned income are seen as at a very high-risk of getting into arrears. And they are, for the most part. Benefits can be reduced, cancelled or suspended and sometimes through no fault of the recipient

silvercar

Buildings insurance can be more expensive for non-working tenants eg directlineforbusiness stipualte that the tenants need to be working or in receit of a pension.

ninky_2

yes it is often a condition of buy-to-let mortgages that you can't let to people on benefit. basically as the property is not totally 'owned' by the landlord due to there being a debt (mortgage) against it, the person (bank) who has lent the money has a right to set conditions over who the property can be rented to. obviously if they said 'no women or black people' this would be illegal, but prejudice on the grounds of employment status is perfectly legal.