Is renting to the council more profitable than private tenants?

hubris

I heard through a local estate agent that my particular council pays landlords a higher rate than they would achieve if renting out privately, e.g. 400pounds a week as opposed to 250pounds a week for a private tenant.

Could this be true and if so, how is it justified? This would be the same council that is planning to close half of the borough libraries, and some public sports facilities.

BitterAndTwisted

Don't look at the monthly rent: look at the long-term consequences. Local Authorities often look for private landlords to house those people who they are obliged to give priority to but whom they are reluctant to give a tenancy for life. Like ex-offenders, people with mental health or substance abuse issues and people like that. An owner-occupier did the same downstairs from me and what was supposed to be a couple with a child moved in and suddenly there were three families living in a two-bedroomed flat. And the the tenancy agreement with the council had been signed for three years. When they finally vacated it cost thousands to get the property back to the same condition it had been at the start. Although councils often promise to compensate landlords for any damage in real life they don't.

PasturesNew

How much they pay, whether they'd be interested in the house, whether the amount's more/less than the going rate in that street/town varies everywhere. A house in one street might be wanted and a good rate paid; a house 2 streets down (seemingly 'better placed') might be turned down by the Council.

So, the answer can only be given on an actual house by house comparison, real like-for-like.

mlz1413

when renting to the council they will probably want a 5 year contract and promise to return the property in the same condition less wear & tear - but this can be rather more tear than wear! ie if the kitchen cupboard doors are all falling off is that fair wear & tear? it's worth asking if the council will pay.

also strict bands are being put in place for payments of housing benefit and it depends on the number of bedrooms and the tenants need for bedrooms. ie a single adult in a small 2 bed flat will only receive benefit for the 1 bedroom rate regardless.

remember EA will tell you what you want to hear, the council will tell you the current rules - speak to the accomadations at your local council.

Jenniefour

Councils who are paying over the local market rate will soon be taking a look at it. I have friends who have a five year deal with a local housing association on two flats. The contract states that rents are reviewed annually and it was revised downwards on the last rent review. So check it out carefully, speak to local housing associations/council first and ask them to send you copy of the contract. Good thing is you know the place will be bringing in rent for every month over the agrees term, so you know the mortgage is getting paid.

Possible downside is what BitterandTwisted is saying - this kind of accomodation is often used to house tenants that some private landlords would be reluctant to consider anyway. One flat of friends has great tenants, no hassle at all. Other flat - first thing tenants did was throw away all the new carpets, which were good quality ones, and have managed to damage boiler twice and caused a few floods for their neighbours, not to mention putting plenty of rubbish in the front garden. And there is an 'extra' tenant - possibly some kind of benefits fiddle as he is father of two children who live there with 'single' mother. And less than co-operative about letting people in to do gas checks and so on - which my friends, under the contract, have to at least arrange themselves.

Jowo_2

A friend signed up to Brighton and Hove council for a 3 year private sector lease and got the property back completely trashed, many months after the lease ended because the tenants refused to move out. The inventory they took wasn't worth the paper it was barely and vaguely written on.

When the tenants refused to leave, a B&H housing officer confirmed that as they held the tenancy with the tenant, the local court was unlikely to award them possession because of their obligations under the Human Rights Act. Basically, they had to coax them out with offers of fabulous accommodation - the tenants had them over a barrel knowing that unless the council proved to a court that they had made multiple offers of suitable accommodation, they could not be evicted. The council was so disorganised with their management of the letting, that they did not even seem to realise the lease was coming to an end - they didn't make their first offer of onward accommodation to the tenants in a timely way.

There were dozens of complaints made by the neighbours and the freeholder to the council about the anti social behaviour of the tenants, one of whom was a convicted sex offender (yes, I know they need housing, too, but it was the icing on the cake to realise that they were being supported by social services and the probation service and seemingly their chaotic drug fuelled lives took precedence over the quality of living experienced by their neighbours. How did I know they were drug users? Because the plumber that came to sort out the property after they left was also one who did the gas safety certificate during their tenancy and saw them use drugs in front of their small child in his presence) .

The council never opened an anti social behaviour case against them, dismissing all reports at the end of the tenancy as 'hearsay', since no feedback was ever reported during it by the council regarding standard of proof so the neighbours/landlord and freeholder believed that they were actually helping to compile a dossier. All the while, the council knew the social background of the tenant who had a child removed from the sex offenders care while resisting any acknowledgement or intervention of the nuisance that they were causing to the surrounding properties.

The council did not maintain the property (the gas safety certificate lapsed, the bath leaked, the kitchen cabinets were damaged, windows were smashed and not repaired, fixtures were ripped off, the cooker was left in a disgusting condition, holes were punched in doors, rubbish tossed in the garden, the property smelt of animal faeces and so on ). They provided no evidence that they regularly inspected the property anyway.

There were lots of exclusions and caps in the lease which put the risk back onto the landlord and meant that the council paid a small sum to the landlord who then had to spend 7k returning it back into the condition in which they rented it out to the council. I helped them to refurbish it and I had to employ a kitchen fitter, glazier, plumber, electrician, handyman, decorator, carpet fitter, chimneysweep and just about every tradesman under the sun, so comprehensive was the thrashing it took.

Brighton and Hove council now have a third party to manage their private sector properties. Presumably they realised that the management of tenants and maintenance was well beyond the capacity of their housing staff after a succession of trashed properties were returned to private landlords.

123louisa

Not all tenants housed this way are bad people!

My sister and her partner have just taken out a private tenancy in which the council are leaseholders for 11 more years. They was in desperate need as her partners dad was evicting them from his home, and she is very house proud and is looking after her home.

There are good and bad and not all are bad!

Fly_Baby

123louisa wrote: »

Not all tenants housed this way are bad people!

My sister and her partner have just taken out a private tenancy in which the council are leaseholders for 11 more years. They was in desperate need as her partners dad was evicting them from his home, and she is very house proud and is looking after her home.

There are good and bad and not all are bad!

Agree. Don't landlords get to vet the council tenants? See if they are employed, how they look, how many children they have?

A friend of mine is trying to rent a house on housing benefit and it is a nightmare because EAs wouldn't touch her so she has to look for private rents - and these are amazingly more expensive and there is far less choice.

She is employed and has a teenage child and knowing her I am sure that LLs would have nothing to worry about. But she hasn't been able to find a property so far.

Jenniefour

Fly_Baby wrote: »

Agree. Don't landlords get to vet the council tenants? See if they are employed, how they look, how many children they have?

No, landlords who let to councils and housing associations do not get to vet the tenants.

Swings and roundabouts. Of course, there are some excellent social housing tenants - my friend has them in one flat and they keep the place beautifully as well. But the folks who most people would prefer not to have as neighbours - the anti social and those who have no respect for property have to be housed by someone, somewhere - and that's the risk you take if you want your rent in every month without fail over a long term whether there are tenants in there or not.

Jowo_2

Fly_Baby wrote: »

Agree. Don't landlords get to vet the council tenants? .

In a private sector lease between the landlord and a social housing landlord, like a HA or local council, the landlord merely hands over the property to them and does not have anything to do directly with the tenants.

And the reason why social housing landlords seek private properties for their tenants is often as emergency/interim accommodation for high priority homeless tenants who they have a statutory housing obligation to house, so it is bound to include vulnerable groups, such as newly released prisoners, etc, which is what my landlord friend was lumbered with.

FOURCANDLES_2

Having read through this post It seems their is a lot of misinformation. As with home owners , private tenants, HA tenants, council tenants , and other you get tidy and untidy people from my business I can assure you you get all sorts in all sorts of properties and some so called professionals are I am afraid very dirty and scruffy people. Of course the council do house offenders and asylum seekers many ex cons get put in council/ha flats as the are in the main single asylum seekers get homes but then again it depends where you live in the uk not many asylum seekers in our HA home in our villages and market towns etc. What people need to remember if you are receiving a decent rent and the tenant is law abiding and keeps the property tidy it is I am afraid none of your business how they live with in that property . Yes the prices paid again will reflect what part of the uk you are in . People must not get bogged down in bigoted views or that of the media hyped gullible