Housing benefit reforms really this much of a problem?

grizzly1911

chucky wrote: »

This is the problem, not that the landlord is over leveraged but that the Universal Credit system will cause problems due to people not managing their finances.

The guy has a business model that he has created, the government changing the rules will certainly cause a problem for the landlord but to the families that live in his properties when they get evicted.

That is the real issue and presumably the on cost to DWP and LAs sorting out the mess, redirecting payments, clawing cack arrears, re-housing tenants etc. will erode any savings made by the changes -if there are in fact any for 99% of cases.

chewmylegoff

PasturesNew wrote: »

This is what being in business is about - taking risks and knowing how the maths works out and having Plan B etc.

If he's got a problem his maths must be wrong and instead of down-leveraging he's over-leveraged.

Absolutely. He can whinge all he likes but it seems he was happy to rent to benefits claimants before but it's all gone wrong for him now. Bad luck eh?

boltneck123

Could he not just slowly start to give out marching orders to benefit tenants in batches of say 20 at a time, and advertise to working tenants, slowly making the transition to a higher % of none benefit tenants? I don't own a property portfolio, but if I was worried about 'risk' of having benefit tenants, it is what I would do.

Graham_Devon

boltneck123 wrote: »

Could he not just slowly start to give out marching orders to benefit tenants in batches of say 20 at a time, and advertise to working tenants, slowly making the transition to a higher % of none benefit tenants? I don't own a property portfolio, but if I was worried about 'risk' of having benefit tenants, it is what I would do.

He could, but 400 odd properties in close proximity to one another will be difficult to offload to those not on benefits in areas of high unemployment. Drip feeding could take a significant amount of time. To do this, he'd presumably have to fund a significant amount of void months. As his issue seems to be the increased probability of arrears, I'd assume he wouldn't be too keen on voids while advertising and waiting for tenants not receiving support.

Also need to bear in mind that the majority on housing benefits do actually work, so if he's avoiding people on housing welfare altogether he could find it even harder in these areas.

boltneck123

Ok, perhaps Graham, it may be hard to fill them fast enough. However, if he only filled 50 of his best properties available occupied by benefit tenants, with employed tenants - that would help ride out any bad benefit tenants missing payments, surely?

He could also update contractual agreements, to state - that tenants who are on benefits and once in receipt of the UC, are required to set up a direct debit payment to coincide with their UC payment day. So as fast as they are paid it, the money is taken. Simple. Then they can spend the remainder of the cash on what ever they wish.

Graham_Devon

boltneck123 wrote: »

He could also update contractual agreements, to state - that tenants who are on benefits and once in receipt of the UC, are required to set up a direct debit payment to coincide with their UC payment day. So as fast as they are paid it, the money is taken. Simple. Then they can spend the remainder of the cash on what ever they wish.

Wouldn't that fall foul of equality rules?

I don't know whether it would or not, but certainly seems like he's treating one set of tenants differently?

grizzly1911

boltneck123 wrote: »

Ok, perhaps Graham, it may be hard to fill them fast enough. However, if he only filled 50 of his best properties available occupied by benefit tenants, with employed tenants - that would help ride out any bad benefit tenants missing payments, surely?

He could also update contractual agreements, to state - that tenants who are on benefits and once in receipt of the UC, are required to set up a direct debit payment to coincide with their UC payment day. So as fast as they are paid it, the money is taken. Simple. Then they can spend the remainder of the cash on what ever they wish.

Is it possible to synchronise the DDR and credit into the account. What if their are other DDRs that need paying, what if they are overdrawn without arrangement, how would the bank know which one to dishonour?

The number of voids/arrears he can sustain will depend on how leveraged he is.

If you have 50 good ones just paying their way there may not be sufficient cashflow or profit in the arrangements to cover too many voids or missed months in a proportion of the other marginal ones.

ukcarper

Watching video it seems he specialize in the type of tenants who needs help and has their LHA paid directly to him so he could still rent to people on housing benefit. I'm not sure where that leaves the people who do need help.

grizzly1911

Graham_Devon wrote: »

Wouldn't that fall foul of equality rules?

I don't know whether it would or not, but certainly seems like he's treating one set of tenants differently?

Didn't UK carper say that there is already a direct payment mechanism for those in arrears anyway.

Surely if you are selling a product or service you can decide how you want to be paid. Even more so if they are being "sold" by individual agreement. It would add to the administrative overhead I would have thought.

DDRs may not always fall on HB/salary receipt days and mistiming/unpaid items would be a bigger issue. It would also add to the woes of the tenant with bank penalty charges.

chucky

I guess this guy is the new hate figure instead of the Wilson's now.