Let to council vs private ?

dellboy102

Hi Guys

My parents want to let there town house (4 Bedrooms), they've spoken with 3 agents who let to the council and offer guaranteed rent every month, they've been offered about £750 a month which seems a bit on the low side but I believe they also pay the council tax and it is guaranteed as well.

Just wanted your opinions on whether generally its a good idea to let to the council or whether its preferable to let to private tenants, I'm very new to this so still trying to do research.

Advice appreciated!

BitterAndTwisted

Generally, the kind of tenants the Council will put into privately-let properties are those which they would not necessarily want to offer a secure tenancy to. In a lot of cases they have also refused to pay the full cost of putting the properties back into the same condition they were at the beginning of the tenancy.

At least if the house was let through an agent there would be a lot more control over who and what kind of tenant the landlord would be prepared to accept.

What needs to be balanced is the amount of guaranteed rent over the 3 or 5 year period renting to the Council plus refurbishment costs versus probably a better quality of tenant but with the possibility of void periods every 6 or 12 months and the uncertainty about the tenants possible change of circumstances and being unable to pay the rent at all.

If it was my property I wouldn't touch a deal with the Council with a barge-pole

Jowo_2

My mate rented her property to a local council for 3 years, they housed a sex offender in an abusive relationship who trashed the house and upset the neighbours with anti social behaviour. The council ignored more than 30 reports of maintenance and behaviour issues. The contract was highly restricted, capping cost of repairs at 2 months rent when in fact it took around a years income to restore it to its original condition. The contract also meant the council could extend the contract or cancel it by giving brief notice but the landlord could not.

Damage included pulling off all window and door furniture, taking a knife to the bath, fag burns in the sink, pet excrement, smashed windows, trashed kitchen cabinets and so on. They also bodged a lot of unauthorised DIY, such as fitting lots of shelves and painting walls (usually around furniture, spilling copious amounts on floors). It required visits by an electrician, kitchen fitter, plumber, heating engineer, gardener, painter and handyman to sort out all the issues the tenants caused.

The tenants refused to leave at the end of the contract and the council admitted there was little that they could do to evict them, as the local courts tended not to award possession to the local council for households with children because of the human rights act that covers local authority lettings. I think in the end the council had to bribe them out with an offer of nice accommodation....

poppysarah

You can work out LHA by postcode and see what you could expect to get for someone on benefits with lots of kids (Extra wear and tear though)
https://lha-direct.voa.gov.uk/Secure/LHARateSearch.aspx?SearchType=PostCode

BitterAndTwisted

Jowo: how much did it cost your pal for the repairs and how many month's rent might that have been equivalent to?

Of course, you can't put a price on stress and heartache even if you can offset all those expenses against income in a business

Cazza

If your parents have a mortgage, it's worth checking this with the lender. Even if the lender has given permission to let, there's a high chance that they will not allow them to let to the Council or any tennant in receipt of housing benefit.

theartfullodger

Well I did it, nae worries, nice lady and son, rent paid on time every time, nae damage except (one incident..)

Went round for some reason (I asked, they said come in..) wee lad (? 12 ish?)said "I've decorated my bedroom" with beaming smile & proud looking mum.. my heart sank... went to look, he'd done quite a good job - if it was a rather dark shade of blue..

Mind you, highlands of Scotland, where, IMHO, almost all the people are very pleasant...

Rent was the same as normal "market" rent because they needed to house them quick and had no alternative but to do a private deal..

quango77

In our borough, the council tend to place people in private accommodation because they are barred from council property. This is usually because of arrears on the persons rent account, generally if someone has been barred because of anti-social behaviour the council will not offer any assistance and refer the person to a supported housing association. Bear in mind that the council will have to take responsibility for any damage to property-but different boroughs may have different rules and regs on that!

dellboy102

Hmm, our agent limits liability to 1 months rent (£750) , I'm guessing theres some sort of insurance I can take out to protect me further..

We looked at private options but the rent is the same and its not guaranteed so I'm still tempted to go for the council option

BitterAndTwisted

You'll need a proper landlords insurance policy and I'd look into this agent covering damages caused by the tenant thing very, very closely indeed. As a general rule agents cover nothing at their own expense, it's always the landlord's cost. Perhaps what they meant was that all repair expenses up to £750 would be arranged by the agent and the cost deducted from the rent collected (£750 being a month's rent). Anything costing more than that would need to be authorised by the landlord and funds supplied before the agents go ahead and arrange the repairs.

You are aware that even should your tenants stop paying their rent you as their landlord are still legally obliged to carry out essential repairs, aren't you? You should join a landlords association before going ahead and perhaps log onto the landlordzone forum and have a read on there to gather some pertinent information before going ahead.

Please think very, very carefully indeed before committing yourself to renting to the council. Read about Jowo's friend's experience! I don't think that what happened to her is unique.

As I said before I wouldn't do it, the risks of something going badly wrong are far too high. How would you feel about having to spend a year's worth of rent getting the property back into a letable condition at the end of 3 or 5 years?

dellboy102

I must admit i'm a bit scared now, I'll go over to landlord forums too and see what I can do..