renting to housing benefit tenants

theartfullodger

Most people in UK are on benefits (CB, Old age pension. DLA/PIP, CTC/WTC etcc etc.).

Less than half population have no benefit.

dekaspace

deannatrois wrote: »

I also would recommend anyone, whether employed or not should be checked thoroughly rather than credit checked by a LA. There wasn't a lettings agency here (I tried them all) who'd consider me as a tenant as they'd only take earned money through their affordability checks, yet my credit rating is good, no debts and no rent arrears at any point. I kept the house in a very good state of repair (include almost complete redecoration in the magnolia colours the LL wanted to help him find a LL buyer - and he sent round anyone who'd buy of course). I lived with frayed laminate floors but the house was repaired by me in the main unless the repair was too big for me.

I'd recommend a prospective LL goes and talks to the prospective tenant in their present home to see if they are clean and keep their place in a good condition. I'd recommend asking to see bank statements to get an idea how responsible they are with money. A previous LL can say the tenant is ok because they want to get rid of them (in arrears). Only CCJ's show up in a credit check (which I didn't have). Being employed is no guarantee that a tenant is responsible and is willing to pay the rent. It seems to me that trusting a property, which is a pretty big investment, to someone on the basis of a very basic credit check and a LL reference (which as said could be false because they're terrible tenants and the LL wants rid) is insane.

I had that problem last year, my credit rating was passed but mentioned as I was on benefits my income didn't count and my current landlord gave me a good reference since it was simple "was rent paid on time, was property left in good state, was notice given" etc. But despite charging me an admin fee and promising me property and even having me sign tenancy agreement they expected me to get a guarantor or pay the whole contract up front and I had to fight to get the deposit back (and they refused fees back)

I was actually suprised to get that far though as a property I was at a few years ago I had identity fraud so even now I randomly get demands for debt I don't owe.

There was one property going back 7 years ago when I left uni I promised LL 3 months rent in advance and deposit as had a summer job lined up that I was promised (as no other interest) only to find after viewing that he had a last minute applicant who was working and he decided to rent to them (so never even got to reference me just turned me down as I was "unemployed" for the week I wanted to move in)

A general thing I do is I hand shampoo carpets (have a proper carpet cleaner now that even if short on expensive liquid I try washing liquid that makes carpet white) last property I spent £30 on cleaning products and scrubbed the place down, polished the furniture, used a window cleaning steamer on windows and LL claimed I left place dirty and blamed me for rusted furniture.

And almost same for one before that, only damage was where the headboard was scraping against wall, there was a handmade cupboard door (plywood no less) that collapsed the first time I used it, kitchen cupboard doors that were badly installed (he installed kitchen himself to save money) so kept falling off, poundland tiles in kitchen that ONE tile cracked in whole kitchen and he claimed he needed to do the whole kitchen again, the stairway had no lighting as a ex tenant when drunk with friends ripped all lights from walls leaving live wire hanging out and he said he had no responsibility to repair, the roof was damaged after a year so had multiple buckets in kitchen and one in living room, the shower leaked into flat below 3 months before tenancy ended and he refused to fix it so I had to hand wash myself every day (his excuse was he would only fix it if I didn't use it as he had to claim on insurance)

Whenever I wanted a repair or disputed something he went on about how his taxes paid for me to live there so I should be lucky to have a roof above my head and should get a job, I witnessed quite a few police raids of the crack den/drug dealer next door and he still did nothing about that and yet harassed me constantly and in the end when I asked for deposit back he claimed I did £2000 in damages! (such as the plywood door that was handmade by him and the holes hidden in kitchen there when I moved in pretty much all his shoddy work) He even charged me for new carpets even though I lived there 3 years and they were budget carpet when I moved in.

Oh and his tenant next door was a drug dealer and his flat was in a far worse state and rigged up his meter but hey at least he always paid rent and never wanted repairs done so was a good tenant!#

I also got various witnesses who said it was spotless including someone who was a cleaner for a living who said for a flat that size it would cost no more than £60 but likely far less to clean the flat top to bottom and landlord claimed hundreds for "cleaning"

The one before that illegally evicted me and even during tenancy he padlocked the door when I was away for the day and so I had to spend week in a hotel and he still wanted rent for that week and he said "it was your own fault" because he refused to give out "private" bank details so I could set up standing order and never turned up to collect rent on days and times he promised (and just said since I was on benefits I had a lot of free time so should wait in all day/week for him just in case) then had the cheek to steal my tv, computer, games console, sky box, cupboard with stuff including sealed clothes (that I saw him wear after) and he claimed I only left rubbish in the property and even years later in street he shouted at me to pay rent I "owed" the alleged rent was £200 and he stole over £1000 of stuff from me.

westernpromise

I have heard anecdotally that if someone applies for housing benefit, is paid it, and it then turns out they should not have had it, the benefit paid to the tenant can be reclaimed from the landlord even if they never paid the landlord. So you actually get not just a default (where they didn't pay), but a liability in addition, and that's before considering the condition of the place in the wake of such a let.

My property is not in HB territory pricewise but I'd be very reluctant to be in that sector, given these risks. As we've seen in this thread, there are plenty of housing benefit tenants who would be fine, but there's no foolproof way to filter out those who would be fine from those who would be a nightmare.

dekaspace

westernpromise wrote: »

I have heard anecdotally that if someone applies for housing benefit, is paid it, and it then turns out they should not have had it, the benefit paid to the tenant can be reclaimed from the landlord even if they never paid the landlord. So you actually get not just a default (where they didn't pay), but a liability in addition, and that's before considering the condition of the place in the wake of such a let.

My property is not in HB territory pricewise but I'd be very reluctant to be in that sector, given these risks. As we've seen in this thread, there are plenty of housing benefit tenants who would be fine, but there's no foolproof way to filter out those who would be fine from those who would be a nightmare.

Misinformation like that leads to more problems.

How do you know you won't get a bad working tenant? Why not rent to anyone just in case? If you refused to rent to say someone on basis of gender or ethnicity there would be an uproar.

What the system used to be like and I assume not much different is if LL was paid direct then was overpaid (even if the claimaint was genuine but theres a doubt) THEN they try and claim back for landlord since they were the ones paid.

When paid to a tenant they may try and get back from landlord but have no power to do so.

Seems like you are going off ingnorance or just not giving the situation a chance and going by worst case scenario, a genuine claimaint has a doubt on claim that means they will leave the property in a bad condition? Seems quite offensive really.

tom9980

westernpromise wrote: »

I have heard anecdotally that if someone applies for housing benefit, is paid it, and it then turns out they should not have had it, the benefit paid to the tenant can be reclaimed from the landlord even if they never paid the landlord. So you actually get not just a default (where they didn't pay), but a liability in addition, and that's before considering the condition of the place in the wake of such a let.

My property is not in HB territory pricewise but I'd be very reluctant to be in that sector, given these risks. As we've seen in this thread, there are plenty of housing benefit tenants who would be fine, but there's no foolproof way to filter out those who would be fine from those who would be a nightmare.

Only applies if council pay the HB payments direct to the LL

Mossfarr

Floxxie wrote: »

If you have a mortgage on you house, expect to pay higher interest (and have fewer options) and have a higher premium to pay on your landlord insurance.

Any evidence to support this sweeping statement Floxxie?

As a landlord for rather a long time I have never had to pay higher interest or higher insurance premiums when I've rented to HB tenants.

Floxxie

Mossfarr wrote: »

Any evidence to support this sweeping statement Floxxie?

As a landlord for rather a long time I have never had to pay higher interest or higher insurance premiums when I've rented to HB tenants.

Sorry just reading your message now. Yes I turned my residential property in England into a BTL and have friends who are renting from me, and who happen to claim Housing Benefit. The mortgage advisor informed me at the outset that there are only a couple of mortgage lenders who will lend (and I undertook that search myself to check). The rate I pay is higher. When I applied for landlord insurance, the question was asked about the status of my tenants and my online quote was increased.

That is my experience from July 2015.

I have done a quick search and pulled this off: http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/10563064/Why-buy-to-let-landlords-are-shunning-profitable-benefit-tenants.html

Floxxie

And here is a more up to date article stating exactly what I have experienced: http://home.bt.com/lifestyle/money/mortgages-bills/housing-benefit-tenants-channelling-rejection-anger-at-landlords-11364047837213

Landlords, meanwhile, have to adhere to the terms in their mortgage contract. Most buy to-let mortgage contracts state that the property cannot be let to tenants receiving benefits.

This leaves landlords with a dilemma: either switch to a mortgage lender which allows benefits claimants, and possibly pay a higher mortgage rate, or find tenants who meet the lender’s criteria.

Unsurprisingly, most opt for the easier and cheaper option and look for tenants who can pay the entire rent from their income from their job.

It’s a similar story with insurance. Landlords are well advised to insure against damage to their property and non-payment of rent, but insurers often stipulate that landlords can’t let to tenants on benefits.

So most landlords pick tenants which allow them to buy a competitive landlord insurance policy, rather than those which will result in paying over the odds for insurance or being unable to buy insurance at all.

Mossfarr

Thanks for that Floxxie - I'm amazed, I've never come across this, maybe I've just been lucky. It amounts to discrimination in my view!
TBH if I thought there would be this sort of restriction I would not have bought any of the properties I have as they are in 'deprived areas' so I was always expecting to have HB tenants.

Old_Git

In Ireland it is now illegal to advertise no DSS.