BTL Lenders reviewing attitudes to housing benefit tenants

MortgageMamma

I just wanted to post this link, its an industry specific publication not intended for the public but I wanted to sprinkle a little hope around for those people who are dependent on housing benefit and struggling to rent a private property. And also for landlords who would like to take on housing benefit tenants but their lender prohibits it.

There is a comments section at the bottom of the article if anyone wishes to air their views....

https://www.mortgagestrategy.co.uk/dwp-threatens-to-regulate-lenders-policies-on-dss-tenants/?cmpid=msdaily_6690531&utm_medium=email&utm_source=newsletter&utm_campaign=ms_daily&adg=89345B2E-1E55-4B3E-987C-C2CA80B30E80&fbclid=IwAR3XKDnvi9B6URNMD13zka5EqGKBKs9qx6re2NMNoX7hT-ciaDSVwgdiCB0

D_M_E

It's not just lenders putting such restrictions on - a lot of landlord's insurance policies also have such restrictions written in them too.

HollySocks_2

Wow, i had read in the press that certain landlords were putting out adverts stating 'No DSS'. I didnt realise that the mortgage lenders were kinda doing the same thing though. A bank forcing a landlord to evict DSS tenents..if ive read that right, thats pretty horrific?

Cakeguts

I read this as the government putting the responsibility on private landlords and mortgage companies to provide social housing for those people who don't fit their local council's criteria. Surely rather than tinkering with mortgages and private landlords the way forward it for more housing associations and local councils to provide more social housing and an end to Right to Buy? Of just a change to Right to Buy rules in that if someone buys their local authority house if they then wish to sell it they have to give the same discount as the got on the sale back to the local authority so that the local authority doesn't lose money?

Murphybear

Unfortunately building more houses is a medium/long term solution.

Prohibiting blanket bans on a section of the community would surely help provide a short term solution. Plus not allowing the HB/LHA to be paid direct to the LL unless the tenant is seriously in arrears was IMHO a retrograde step.

So, short term solution - pay all HBs direct to LL which will reduce a lot of arrears and hopefully that would placate mortgage and insurance companies.

Long term solution, build lots more houses and no, I'm sorry, I don't know where the money is coming from

I have a friend who runs a big letting agency and a few years ago when unemployment was much higher in some parts of the country he said that if they didn't let to tenants on HB they wouldn't get any tenants

Finally I understand they have banned the equivalent of the "no DSS" rule in Ireland and it hasn't caused any problems

MortgageMamma

I just wish more of society in general was more humane about helping those at the bottom, who are struggling to keep their heads above the water, or sinking. I'm not saying everyone should get a free ride in life, but our safety net for these people should be more robust.

Murphybear is right though. Where is the money going to come from?

It bothers me that there are so many people in difficult housing situations or even homeless. I've actually been homeless myself a good 25 years ago and slept in a park building for a week.

Someone said on my facebook profile in response to this same link that its another measure the government are taking to punish private landlords and control rents to sit at or around the local authority housing benefit levels. I think thats an extreme view and quite cynical to be honest, but I can see his reasons around it given he's lost money due to the ongoing tax changes to buy to lets. I still argued a fair bit with him though. He has a home, holidays, nice cars, can feed his family. There are people out there sleeping in sub zero temperatures night and night, and families squashed into one room in hostels because there isn't enough housing.

Okrib

The problem here is that people on benefits are far more likely to fall into arrears, far more likely to cause significant damage to the property etc.

It's easy to blame landlords / lenders but I doubt these issues would exist if rents were paid on time and the properties were looked after. I would argue that because they are being subsidised there is less incentive to look after the property.

The paying of rent money to the tenant rather than the landlord was one of the stupidest ideas I can remember and the issues this has caused were entirely predictable.

MortgageMamma

Orkib

I do agree with you in part re damage and arrears but I do believe a lot of arrears are due to benefit stops for silly reasons.

Regarding the damage issue. A simple change to the law in a landlords favour could quash a lot of that. Being able to be pursued effectively and quickly for damages would alleviate the problem.

There will always be people that do that though, private or social tenants. I've seen properties left in a disgusting state by working people plenty of times due to their lack of time.

Morbier

Here we go again. Tenants on benefits "are far more likely to cause significant damage to the property etc". Really? What information do you have to back up such a sweeping statement?

I know it's off topic, but I feel compelled to highlight these generalisations, which appear far too often.

MortgageMamma

Morbier wrote: »

Here we go again. Tenants on benefits "are far more likely to cause significant damage to the property etc". Really? What information do you have to back up such a sweeping statement?

I know it's off topic, but I feel compelled to highlight these generalisations, which appear far too often.

I'm not on either side of the fence in this argument as I have been both homeless, on benefits and rented privately in the past. But I think the comments I made on the original article I posted above made a competitor publication publish this today


https://www.mortgagesolutions.co.uk/news/2018/11/21/benefit-changes-behind-rise-in-homelessness-rla/

Morbier

MortgageMamma - just read the link, thanks for the info.

The report from Manchester University is confusing. It says "in cases where tenants are asked to leave under S21, half the notices are used where tenants have rent arrears, are committing anti-social behaviour or are damaging property".

Not sure why you would use a S21 for rent arrears, S8 surely? Even then the proportion of those tenants being served S21 for damaging the property is minimal. Still doesn't merit all tenants on benefits being tarred with the same brush.

I agree with the report's view that there should be more co-operation between councils and private landlords, with a view to making the LHA more realistic. Won't happen though.

I'm a tenant, not on benefits and don't damage my LL's property- for what It's worth!