Should I take DSS?

Christabel

I have always managed to let my studio flat to employed people but no one seems to be interested now. I have always shied away from someone on benefits as I believe that they have the power to pay their rent or withhold it if a bit short of money.

I've got no knowledge of the benefits system so would appreciate a bit of help with deciding if I should allow DSS.

Hump

You need to check out http://www.direct.gov.uk/en/Diol1/DoItOnline/DG_196239 and work out if your asking rent is the same as or less than the local housing allowance for your property's area. If it's not then forget Housing Benefit/ low income (DSS) completely.

If you're tempted then scouring this forum you will find landlords who have had a hell of a time with HB cases, and prospective tenants who are desperate to find a landlord willing to take them on because they receive benefits.

Whatever you decide - if you go for a HB case then your tenant will receive an amount towards their rent straight into their bank account (not yours) every 2 or 4 weeks in arrears (not monthly in advance like your tenancy agreement says) - their HB will stop if their circumstances change i.e. they start work, gave their JSA claim stopped because they miss an appointment.

lovinituk

Our current tenants are DSS and are some of the best we have had.

We had the option for the rent to be paid to us directly by the benefits office or for the tenant to pay us - we opted for the tenant to pay us and then if there were ever any issues with benefit overpayments, that would be between them and the tenant and nothing to do with us. We do have rent guarantee that required the tenant to have a guarantor.

Be aware that your buildings and landlords contents insurance will be more expensive by haviing DSS tenants.

BigAunty

Landlordzone has a forum dedicated to housing benefit (local housing allowance for private tenants). Read and post in the forum there.

The switch from HB to LHA means that tenants now receive their LHA directly (unless classed as vulnerable) and this has deterred some landlords from accepting them because of the perceived higher risk. It's not possible for the tenant to opt for the landlord to receive the benefit directly - the council makes this decision.

Landlords who do accept LHA claimants are typically advised to insist on a guarantor and to do all the usual thorough tenancy screening - previous landlord references, credit check, ID check etc.

I've heard that claimants can invalidate certain types of insurance, not sure what type or if this is true.

LHA claimants have the reputation of being harder to evict, simply because they can struggle to find onward accommodation and if they apply to the local council as homeless, they may be advised to remain in the property until the landlord has gained a court order. It's a policy nicknamed 'gatekeeping'. Councils can't dish out social housing to every tenant that receives a notice from their landlord so try and make it trickier to obtain, in order to cut down on demand.

lovinituk

BigAunty wrote: »

I've heard that claimants can invalidate certain types of insurance, not sure what type or if this is true.

Some mainstream house insurers won't insure properties with DSS tenants. We were originally with Direct Line who would no longer provide cover once the DSS tenants moved in.

Brallaqueen

I'd advise you drop the price until you get interest from your preferred type of tenant.

Letting to LHA tenants can be pretty specialised and have particular risks associated (LHA payments in arrears, deeds of guarantee required, often no way of collecting debts from them).

Leon_W

If the property is mortgaged then some lenders exclude DSS. Be careful.

As to whether you should take DSS or not I would say no. I have had some good DSS tenants when the rent was paid to me directly. When they changed the rules, my future DSS tenants were a nightmare. Funny that !

Christabel

Thank you all for your considered views. I think its maybe a bigger gamble than I am willing to take so maybe will, as suggested, drop the rent. Mind you, its only £300 a month now, plus bills, but that is for a studio flat so they sleep in the living room. Its fully furnished too.

The downside is that one other flat in the block (no doubt DSS) have terrific rows and use very bad language which disturbs the other residents. I've rung the council to complain but they will only send someone round when the noise is going on and my former tenant didn't want to complain while living there. These flats are only suitable for a single person so its no wonder they fall out. The landlord of that particular one is known to be an uncouth rogue anyway.

Thanks again.

jojo_2012_2

I agree with what someone said above about needing a guarantor just to be on the safe side.

I currently rent my house with my father as a guarantor and get some HB despite being employed full time, and have been here 5 years and not missed a payment and house is in good nick, neighbours are happy etc.

But as someone said if someones making a new claim upon moving in you might have to wait several weeks for your first payment. I think when I lived in Redbridge it was something like 12 weeks!!!! Where I am now is 3 or 4 weeks but you could enquire over the phone they'd probably give you some idea.

tbs624

Jamie365 as a you're a newbie you perhaps won't realise that the the forum is not intended to be a free advertising platform for those running a business

tbs624

Christabel wrote: »

I have always managed to let my studio flat to employed people but no one seems to be interested now. I have always shied away from someone on benefits as I believe that they have the power to pay their rent or withhold it if a bit short of money.

You run that risk with all Ts - there can be some in employment who are more "strapped" than those entirely reliant on benefits, and just as likely to try to use the LL as a free overdraft facility when things get squeezed.

Run proper checks on every potential T and obtain a guarantor if there is likely to be an issue with the T meeting their financial obligations. Not all LHA claimants are !!!!less folk out to diddle their LL at the first opportunity.

Remember that the "ideal" T who is currently employed and ticks all your boxes prior to moving in may well get made redundant two months into the tenancy

If a potential T can supply good references (and there is no untoward term within the mortgage Ts and Cs) then many LLs *will* take those in receipt of benefit, esp. with a guarantor in place. Sometimes the T can obtain a form of deposit guarantee via their local Council if they would struggle to raise that and the first month's rent in advance.

Is your studio flat under a standard residential mortgage btw? If yes, have you sought Consent to Let from your Lender?