renting to housing benefit tenants

theartfullodger

Floxxie wrote: »

....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......

Really??

The old myth, so popular with landlords looking for an excuse not to rent to decent people.

I doubt your alleged restriction very much: Might say must have employed tenants, but if you can find any mortgage conditions that say tenants cannot be anyone receiving benefits there's £10 on offer to an agreed housing charity (NI based if you wish). As I noted above.

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

Less than half population have no benefits paid

And the old "insurance" excuse: f.. it's simple enough to cancel or modify any insurance which did have that restriction and get cover which includes unemployed tenants or those on HB/LBA, albeit perhaps a little more expensive: Probably no more than another £10/month.

Floxxie you have children? If so, presumably in receipt of CB, Child benefit: So you, a landlord as I am I think, would not rent to yourself then?

Sigh!

Flosmum_2

I rented to a tenant on benefits and it's he only tenant I had that went into arrears and I had to evict. My husband however rents to a lovely lady on benefits and hasn't had any issues in the years she's been there. Shame that some people ruin it for others as I would be reluctant after the issues I had. Councils should pay housing direct in my opinion

HappyMJ

Flosmum wrote: »

I rented to a tenant on benefits and it's he only tenant I had that went into arrears and I had to evict. My husband however rents to a lovely lady on benefits and hasn't had any issues in the years she's been there. Shame that some people ruin it for others as I would be reluctant after the issues I had. Councils should pay housing direct in my opinion

As a landlord I do not accept tenants who want the council to make direct payments of housing benefit.

I prefer my tenants to be responsible enough to manage their own finances and pay the rent on time each month even if that payment is essentially income from benefits.

I do not want to be faffing about figuring out exactly what my tenant owes as HB is paid fortnightly in arrears and rent is due monthly in advance.

I also do not want to be liable for benefit overpayments. If the tenant is given the HB then the tenant is liable to repay an overpayment even if they've used it to pay next months rent.

I also want to be paid rent in advance. HB pays rent in arrears after the rent is due.

I do accept tenants on benefits but they've got to be responsible with money. They've got to have saved enough to pay the first months rent and enough to put down a deposit. I would not accept any tenant that has a CCJ for rent arrears.

dinkylink

I've rented to a family who are on benefits (neither parent works) for the last 6 years.

On the whole they've been pretty good and are also nice people to boot.

But I do pay a premium for buildings insurance and remortgaging was a nightmare; finding a lender who would allow me to have tenants on benefits was hard and also cost me a premium.

Floxxie

Mossfarr wrote: »

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.

I think next time you remortgage, and assuming that you mention the tenant type, you will experience it!I completely agree on the discrimination side and I feel it is another way of removing landlords who offer property to 'benefit' tenants. I understand mortgage lenders can decide who to lend to, but I do wonder who they are taking their directions from

GobbledyGook

I'm possibly (probably) slightly unusual as a LL in that I'm happy to have HB tenants. In fact I'd rather have a tenant already in receipt of HB that a working tenant in a shaky or seasonal industry. The biggest issue with HB is when people put in their claim, it can take weeks and weeks and that is, I think, when the problems can start.

My last tenants were a parent caring for a severly disabled child. There was, sadly, no chance the parent was going to be able to work because of the care the child needed. Their income was regular, there was no changes of job to factor in and they kept the place immaculate.

There is also a bit of a safeguard in that you can ask for the rent to be paid to you if problems start. Now that's by no means ideal, BUT you can't go to someone's employer and ask for part of their wage if someone not on HB stops paying so it is a little thing that can help.

I think HB should be like everything else - don't have a blanket rule. Trust your instincts. The worst mistake I ever made as a LL was I ignored my instinct on a "professional" guy with glowing references who walked the credit check. I ignored the fact that something bothered me about him and he trashed the place.

Also if you have a strict no HB rule what are you going to do if your tenant gets made redundant and ends up on benefits?

Floxxie

theartfullodger wrote: »

Really??

The old myth, so popular with landlords looking for an excuse not to rent to decent people.

I doubt your alleged restriction very much: Might say must have employed tenants, but if you can find any mortgage conditions that say tenants cannot be anyone receiving benefits there's £10 on offer to an agreed housing charity (NI based if you wish). As I noted above.


And the old "insurance" excuse: f.. it's simple enough to cancel or modify any insurance which did have that restriction and get cover which includes unemployed tenants or those on HB/LBA, albeit perhaps a little more expensive: Probably no more than another £10/month.

Floxxie you have children? If so, presumably in receipt of CB, Child benefit: So you, a landlord as I am I think, would not rent to yourself then?

Sigh!

This isn't a myth. It is a fact. It relates to 'housing benefit' tenants, not just 'benefit' tenants. And my house is rented out to housing benefit tenants as I have paid the extra costs in terms of mortgage and insurance to give them a home.

Floxxie

Old_Git wrote: »

In Ireland it is now illegal to advertise no DSS.

In Northern Ireland, it is the norm to have housing benefit tenants and the lettings agents actually fill in the housing benefit forms for the tenants!

LittleMax

When I became a landlord 3 years ago I would have been happy to have tenants in receipt of benefits, however I was keeping my existing mortgage with permission to rent, and there was a clause expressly refusing permission to lend to benefit claimants.

I have previously worked in customer service posts at local councils and a housing association dealing with benefit and housing enquiries, and from this experience understand that there are lots of really good people struggling with a system that is slow and cumbersome and too easily allows them to fall into arrears.

Had I been able to take a tenant on benefits, I would not have accepted direct payments (not sure if this is still an option). It takes too long to get the tenant to act where an issue arises, and they often deny there is a problem because they simply don't know what to do to sort it out. It also removes the mentality of 'I don't pay rent'

The system also pays in arrears whereas rent is due in advance - if claimants do not have some money behind them this can be very troublesome for them. As a landlord taking on a tenant on benefits you would need a good combination of patience and yet firmness when required. You need to understand that through no fault of their own there will be issues with claims for benefit from time to time, but as long as they are on top of it the arrears will come through. Flexibility is required when they alert you to an issue, however when the payment comes through they need to pay you as a priority debt and bring their rent account up to date. Not all tenants do this, as not only will they have fallen behind with their rent, they will also have struggled with other bills - they will then be inclined to pay the creditor who is shouting loudest, you need to make sure that is you!

Floxxie

I have a BTL mortgage that is expressly for HB tenants. I think when it came to finding one, Santander and TMW were my options.

I don't know about other lenders but Accord apparently don't accept HB tenants (this link is from 2013 so they may have changed their policy?):

Lloyds Banking Group said:

“We constantly review our policies, however, the current terms and conditions of our mortgage policy do not enable borrowers to let their property to tenants claiming housing benefit. Should the circumstances of the tenant change, we would expect the landlords to consider each case on an individual basis. Landlords do not need our consent to terminate or renew a tenancy agreement.”