Renting property to Council or Housing Association

Locana

Hi,

Wondering if anyone has any ideas or experience of the above. My sister is thinking of renting out her property and is looking at the following;

DIY
Letting Agents
Renting to HA or Council

The latter is appealing to her as you get guaranteed rent for a period of time etc, wont have the 'worry' of managing it, they fix your place, gas checks and leave in a state that they find - so they say. Is this true?

My sister property is ex council, on a large estate in Southwark (Peckham), and in need of a little refurbishment, but in the local councils opinion lettable as it is. She understands that the rent is a little less than you would get privately, but is thinking that guaranteed rent may be better than potential voids - loss of money if done privately. She is happy to rent out for a significant amount of years as the yield would be around 15%.

She is not too worried about tenants, as there are good and bad in all people. The property would be let empty so getting it back at the end of time and having to replace carpets and waallpaper would not be an issue. IMO the kitchen and bathroom need doing, but as the council say its lettable, she can leave this till she gets the property back and replace herself later down the line.

Is this a good option? Anyone have any experience? Would the local council/HA say that they do these things and stick to it?

Thanks
Lo

patman99

Be warned. A friend of mine rented his property to a LA and the tenants caused £10,000 worth of damage to it and the LA only offered to pay £6k until he threatened them with Court. Unfortuanately, the deal with the LA was tied to a 5 year contract (the minimum the LA would agree to). The next tenants in caused almost as much damage.

He no longer rents to LA, but private tenants. None of them have caused any damage so far.

want2bmortgage3

The main thing to consider is how long she wants to rent for? It it's long term then fine, council could be a good option. If your sister wants to move back in within a year or two then don't use the council. Even if your council tenants want to move out, if the council has no alternative properties or has a long waiting list then you could be stuck with tenants for a very long time. Issuing a notice won't make a difference, you would have to go through court process to try and regain possession.

Mr_Textiles

I didn't know you could rent your property out to the council/LA!

Learn something new everyday - but I'd rather rent to private tenants than the council!

want2bmortgage3

I'm not sure you can rent directly to the council. I think it is more like a deposit guarantee scheme, where the council provides a guarantee that they will pay for any damages, due to most council tenants not being able to afford a deposit.

I think the councils want to give tenants responsibility to pay their own rent, so the tenants will recieve HB which they will be expected to pass on to the private landlord. They may have to pay some of their own income if they are working and not receiving full HB from the council.

Locana

You can rent directly to the council (Southwark do) who will then let it to tenants. They pay the rent directly to the landlord rather than the tenant. Some offer an incentive, some housing associations say that they will repair your property if need be before they lease it off you (Hyde Housing). But just really wanted some stories to make a decision, good or bad! The current decor is representative of all the other flats on the estate, she didn't do much to it when she purchased it.

What kind of damage have people done?

The length of leasing is not a problem, I don't think she will sell it for many many years due to the yield.

However I think if she rents it privately then she is definitely going to need to do the bathroom and kitchen which will cost some thousands.

I think the council/HA want the bath and kitchen quite basic so they don't have high repair costs if the tenant requested repairs. I also think they said they wanted the shower head detached to keep costs down...

blckbrd

want2bmortgage3 wrote: »

I'm not sure you can rent directly to the council.

Depends on the council - some you can, some just manage. Doesn't neessarily have to be your local council either.

I think one of the problems for landlords in private setor leasing arrangements can be a council's definition of 'lettable condition'. Someone's pristine property may come back to them looking like the kind of tip a council would consider lettable so that any commitment to carry out repairs is less attractive than it may first seem.

Loopgames

want2bmortgage3 wrote: »

I'm not sure you can rent directly to the council. I think it is more like a deposit guarantee scheme, where the council provides a guarantee that they will pay for any damages, due to most council tenants not being able to afford a deposit.

I think the councils want to give tenants responsibility to pay their own rent, so the tenants will recieve HB which they will be expected to pass on to the private landlord. They may have to pay some of their own income if they are working and not receiving full HB from the council.

No that's not what the op is talking about. You can rent to the council under a lease arrangement whereby the council pay you or their agent the rent who then pass it to you.

G_M

Read this post for more...

Locana

Hi,

We've read that, it's like a bible at the moment! The mortgage lender is prepared to give permission to let to the council/HA as it's an ex council property on an estate, I guess rather than a 'nicer' property in a better part of town.

Rent privately around here for about £1200, and LHA is £1040 per month, so £160 less. You could get more rent for a two bed flat, however I'm guessing people would rather pay a little bit more if it wasn't on an estate.

I'm also aware that local authority's are or will be discharging their homelessness duty into private rented accommodation, and was hoping that councils would have taken this on board and improved relationships between themselves and private landlords by treating LL's properties with the respect it deserves! Maybe that's just wishful thinking...!

Just don't know! :-/