Renting to DSS tenants

dlk

Having rented 3 houses out as HMO's for the past 7 years I've decided for one of those to rent as a single home instead. Most applicants have tended to be DSS and I'm aware that a lot of landlords won't accept them.

My question is why? As the rent comes direct from the housing benefits I'm unsure what the major downside to renting to DSS tenants is. I'm sure there must be one but it escapes me why they are deemed such unattractive tenants. Does anyone have an answer as I don't want to rent this way only to discover a horrific oversight that I hadn't thought of as to why I wouldn't want to rent to them?

bobby-boy_2

Because your insurer will load your premium or refuse cover.

Or even better when they spend the LHA THEY get direct from the goverment on everything except rent how are you going to get any money from your court order, cant exactly stop their wages can you.

Old_Git

in Renting DSS are seen as one step above student .
LHA is paid to the tenant ,your insurance will be higher .
more difficult to get them out as they dont have the deposit to move on .

Wee_Willy_Harris

LHA payments do go direct to tenant, but this hasn't proved to be a major issue for the majority of LLs. You can easily find out the LHA rates prior to the tenancy, so will have a pretty good idea what they can afford. If they fall more than 2 months behind, you can get the LHA direct to the LL (More than you can say with self funding tenants). The legislation for eviction remains the same as for any other tenant.

Regardless of the prospective tenant claiming LHA, it is always wise to carry out pre tenancy checks to minimise the risk. But, having done so, LHA tenants are no higher risk than any other tenant, despite the perception.

mandi

bobby-boy wrote: »

Because your insurer will load your premium or refuse cover.

Or even better when they spend the LHA THEY get direct from the goverment on everything except rent how are you going to get any money from your court order, cant exactly stop their wages can you.

On the otherhand , you have LLs who despite the fact that the tenant has totally redecorated , keeps the lawns short , and pays the rent on time , wont paint the fences , update the kitchen or spend a single penny accept in an emergency , but quick enough to pick the phone up without hesitation if the rent isn't " showing on the system " the day its due.

We are not all bad you know

Wee_Willy_Harris

bobby-boy wrote: »

Because your insurer will load your premium or refuse cover.

Or even better when they spend the LHA THEY get direct from the goverment on everything except rent how are you going to get any money from your court order, cant exactly stop their wages can you.

No, but the arrears can be minimised by getting the LHA direct to LL if 2 months in arrears. Something you can't do with NON LHA tenants.

dlk

Thanks everyone. Not too worried about the buildings insurance premiums as this is a reletively small issue relative to the rental income.

From what's been said it seems better in many ways than professionals if after two months of arrears (not that I want that)you can have rent paid direct. Anyway having been used to renting individual rooms to student/young profs it at least reduces the amount of tenants I have from 3 to 1 so if nothing else reduces the chance of a bad tenant by a two thirds.

C_Mababejive

OK so they arent all bad but generally,if someone is a dolehopper,they have plenty of energy to do other things. Like have troublesome partners visiting/staying over,party,annoy the neighbours etc.
IMHO BTL properties can often blight many reasonable streets.

dlk

C_Mababejive wrote: »

IMHO BTL properties can often blight many reasonable streets.

A tad harsh to say people who rent are a blight on a neighbourhood!

Jowo_2

Read the HB/LHA forum on the Landlordzone website to understand some of the common issues and the advice that experienced landlords give to novice landlords to better manage the higher risk that LHA tenants present, such as thorough tenant screening and a request that the tenant provides a guarantor.

One major problem is that it is harder to evict LHA tenants than working ones because they are more likely to contact the council housing to say they are about to be made homeless. Local councils will then routinely tell the tenants to ignore the notice served by the landlord, forcing the landlord to take them to court. This is known as gatekeeping whereby the local councils, overwhelmed with people trying to secure social housing, will try to cut down on the demand on their services by telling the tenant they will be considered to have made themselves homeless if they leave ahead of the landlord winning a court case for possession against them.

Secondly, arrears racked up by those on benefits are rarely recoverable. Even if a landlord gets a court judgement in their favour, it's pretty impossible to enforce on someone who has no employment income.

Jowo_2

Wee_Willy_Harris wrote: »

No, but the arrears can be minimised by getting the LHA direct to LL if 2 months in arrears. Something you can't do with NON LHA tenants.

The arrears can't really be minimised, as such, by getting the local council to switch payment to the landlord, they can simply perhaps prevent them from getting worse. A tenant on benefits is in no position to pay back several months rent from their benefits - it's a write off from most landlord's perspectives.

Secondly, if a landlord receives direct payments from the council who then decide the tenant has submitted a wrong or fraudulent claim, the landlord must pay back the LHA they've received.

This is one of many reasons why landlords often avoid LHA tenants - they are simply too risky, the system isn't very good.