A slump in the number of private landlords in London willing to take homeless people on benefits must be addressed, town halls have warned.
Umbrella organisation London Councils says that the number of private landlords who will take such tenants has fallen 20% in the last year.
As a result, councils are having to accommodate homeless people in temporary bed and breakfasts.
Latest figures show that London’s councils are having to accommodate nearly 900 families with children in this way, for more than the six-week period set out in Government guidance.
London Councils says that private landlords do not need to rent to homeless people on benefits of rising rental demand from tenants who are in work. Landlords are also worried about changes in the benefit system.
Landlords’ reluctance means that councils are in a very weak position when attempting to negotiate rents down.
London Councils said it has had discussions with the Department for Communities and Local Government about action to bring private sector landlords back into the social housing market.
Ideas include tax relief for landlords.
London Councils executive member for housing, Lewisham Mayor Sir Steve Bullock, said: “We need a concerted effort by central government departments and councils to take action to ensure a supply of good-quality, affordable homes in the private rented sector.”
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Comments
I agree with most of these comments BUT I work and have 3 boys and I have to claim housing benifit to top my rent up I'm finding it hard to find a properties to rent because of the way other people treat the benifit system so unfair on us who try our best and because we need help its used again us :(
We have had a tenant on benefits in our property for the last year. They have been fine until now. We are trying to get them out for a family member to use the house as they have been living in caravan and are looking to move on and upwards to a house etc. So we gave our tenant plenty of notice to get out so as all could fit to the schedule of family member. We have now been told that our tenant has been advised by the council staff to stay put and not move out as if she makes herself homeless they will not house her. This is not the case as she has already been offered a few properties by agents but she is again playing the system to get a council property and there is nothing we can do and we will have family member now living in our house as they have nowhere to go thanks to Haywards Heath Council
Patsy
Thanks for your kind words. I am sure that most people who have experience in this arena could have written the same as I did so I will politely decline your offer to stand as PM!!! LOL (thanks for your vote of confidence though).
Anyhow I don't think I could stomach working with people who make decisions without facts which is clearly what has happened with LHA.
As far as "unravelling" the mystery behind this ridiculous legislation, you raise an interesting point by just raising it!
I actually think the reason there has been no U-turn and no sign of one any time soon is due to accountability and responsibility. You see, technically, a head or heads should roll if any Government official actually admitted "do you know what? - we got it wrong". Same old story - politicians looking after number one.
Take some of the posts in this thread so far by colleagues with experience of letting to LHA Tenants. Read them again and read them closely. You can actually SENSE the frustration, disappointment and despair in their wording of them. Appalling for people to have lost out financially because of an ill-thought out decision taken in the "square mile". The "square mile" is my description on "make believe land".
There is mention in this thread of people "working" the system - I agree.
I will add some personal information at this stage. My Mum is in the process of moving into sheltered accommodation after splitting with her partner. She is 69, has a state pension and a very small private pension.
She took the keys to her one bedroom apartment in the sheltered block just last week. Her, myself and other family members will now spend a couple of weeks painting, getting carpets fitted etc. etc. She told the LHA office that she took the keys 2 weeks before she was due to move in per say so therefore paid the rent for those two weeks from her own pocket. The LHA will commence from the day she starts sleeping there.
Okay I have to say at this point that I would have commenced the LHA from the day I took the keys, slung a mattress in the bedroom, a tooth-brush in the bathroom and dotted a few clothes around the place. Sod paying two weeks rent out of my own pocket. Why? because I can.
Why make this point? I am making it because she is an example of what the welfare state was created for. For people who have worked all their lives and are retired or for people who fall on hard times (job loss/separation etc).
The problem is that Governments through time have gradually shirked away from tough decisions and created a welfare state which is one in which (in some cases) generations become "dependant" on. Other posters comment on people "milking" the system. I agree. It wouldn't happen if it were not allowed to happen.
Why are we paying more insurance premiums for our cars? Because the compensation culture has been allowed to happen and people milk the system by claiming thousands of pounds for a supposedly sore neck.
Hey though - If someone ran into the back of my car and someone said to me "I can get you a few grand for this". Would I turn it down - honest answer.....No. Why? because I can claim it.
Winter fuel allowance: Why are pensioners who are seriously hard up (lived through the war etc.) paid a fuel allowance when other retired folk who are wealthy also receive it. It should be means tested. LHA is after all.
I don't consider myself to be a hypocrite and will openly say that if I was a pensioner in the latter category I would claim it. Why? because I can.
People are people. No-one thinks about the wider implications of "looking after number one". If we were all honest this is a true statement.
The morale of this story. Looking after number one is what got the PRS/LHA sector into such a complete mess because the decision maker who said "lets pay LHA to the Tenant" won't roll over and admit it was a wrong call.
If this is not a paradox I don't know what it.
:-)
I have had my properties trashed and wrecked by tenants on housing benefit. The tenants were not punished. The tenants wrecked my property maliciously, to get council housing. They do this to play the system, and become a priority case for social housing. In the mean time the good tenant who have waited on the housing queue, as jumped by the criminal tenants.
KEV
I read with interest all your comments and could'nt agree more with what you said.
Im sure one day in the future we will find out what is really behind these policies, which are so unfairly weighted against the Landlord. There has to be some underhand agender to it.
If our MPs had a quarter of your common sense us Landlords would be in a much better place than we are today.
Have you ever thought of running for Prime Minister - you have my vote.
Great article!
It is not so much the fact that benefit claimants don't pass on the LHA it is the fact that if this occurs a LL CANNOT evict the tenant forthwith.
If a tenant; any tenant could be evicted by police as a squatter as soon as they failed to pay 1 month's rent then things would change overnight.
For a tenant to face immediate eviction if the LL so chooses following non-payment of rent would concentrate a tenant's mind immediately!
Immediate eviction need only occur in cases of non-rent payment.
I choose NOT to rent to LHA tenants due to the losses I have incurred as a result of LHA tenants I had not paying rent and then the many months it took to evict them plus all the other losses caused by them of theft and damage.
LL will not rent to these tenants due to the way the system protects the tenant,
We have a crazy system; unique to any business in the UK, that requires the lettings business of a LL to continue to provide an expensive service with rent being payable and the only way of preventing this non-rent payment is eviction, which takes months if not YEARS!
I am nearly at a year with a tenant I am evicting!
Fortunately she wasn't full LHA and passed a RGI check which is paying out , thank God, or I would have been bankrupted.
Let us for a few moments consider running the UK as directors run a business.
I was once a director of a company turning over £300 million per annum before entering the letting industry.
People working for me made decisions and implemented change. The measure of success of such decisions/changes covered many arenas - mainly increased efficiency/profitability etc. Some were successful, some failed. For the latter, they were subsequently changed or abolished - by the instigator.
Someone or a group of people in our government decided to pay LHA directly to the Tenant. All of us in the letting industry predicted the subsequent hike in rental arrears and shying away of BTL investors from renting to LHA tenants.
I have a report commissioned by the DWP which PROVES it failed. All the good folk in the industry who contribute to sites like this one echo the findings of the report.
I didn't mind my staff implementing something which then failed. I treated them with empathy and encouraged them to learn from their "mistakes" and they did.
My strategy has always been "hey - it's okay to make a mistake - as long as you learn from it".
If the blundering idiot(s) who recommended direct LHA payments to Tenants worked for me - quite simply - I would fire him/her/them and I would do it with a big smile on my face.
They MADE THE MISTAKE, the evidence is clear, yet they will simply NOT rectify their mistake based on the resulting "carnage".
The whole strategy was to "help" housing benefit claimants achieve a feeling of "responsibly managing their affairs". Well I estimate that a single digit percentage of housing benefit claimants actually hit this target.
Many of the remainder have caused financial misery to their Landlords. In addition, local Councils now face a chronic problem of housing LHA Tenants because the PRS Landlords see the error of the Government's ways.
None of this is rocket science.
My sympathy is with the Landlords who have lost out financially from this ridiculous change. I absolutely feel for every one of them who entered the BTL industry only to be "shafted" by a change made by people who (in my opinion) legislate OUTSIDE the real world.
When I ran my division of the company I worked for, every decision I made was made by involving my staff and consulting them. THEY were on the front line - THEY had the facts. Why didn't our government(s) consult the experts in the letting industry?
I have 10 years letting experience and I am sure many of my colleagues on this forum have much more than me. I am also very sure that, had the government consulted "us" and actually LISTENED to us, the legislation would not have been made.
To anyone who reaches this point in my post, I apologise as this has become a "rant". I just feel so strongly about the issue.
So much common sense in the above comments.
If only our Government were as wise, our housing and country would'nt be in the mess it is.
All a Landlord wants is to let their property and receive their rent. Government has no idea, and dous'nt really care how the real world works or if we are paid.
But they do know how to keep claimimg hugh expenses, living the high life, and how to defraud the taxpayer.
Landlords are now hit from all sides. It is getting harder and harder to take a deposit or rent in advance, to try to protect ourselves against tenants not paying their rent.
Im sick to death of everything being in the tenants favour, they do as they like and come and go as they like, the Contract only applies to the Landlord who is expected and made to do everything perfect.
We are also going to have to pay a large registration fee for each property in the future which is just another way for the Councils to bleed us dry.
LHA paid direct to tenants is a ridiculous idea thought up by rich, privilaged morons called MPs, no one wants it, it does not work, so why, oh why does it carry on. The tenants are not made more responsible, in my experience it just makes more people homeless.
My only hope is now that the Housing Associations are going to be in the same boat as the Private Landlord they will shout long and hard to the Government to change this stupid legislation to pay all housing benefit tenants direct.
Now that they will be affected perhaps something will be done because while it did not affect them they remained pretty silent.
UNLESS THERE IS CHANGE I cannot see myself renting to Housing Benefit tenants in the future, and I'm sure there will be many like me.
The Councils ARE aware of the fact that Private Landlords WON'T let to LHA tenants again until direct payment from day one is reinstated.
They tell the Government.
The Government tells them they are wrong !!!
The Councils are not only being inundated by private Landlords saying - where is my rent ? but from April, they will have all the Housing Associations saying where is our rent ?
To cope with this - the Government are cutting their staff numbers to deal with it.
Landlords need to reply to the Government by taking off to Majorca with their Income Tax.
Maybe then they'll get it !!!!!
Probably Not !
Some benefit Tenants are okay (from my experience) however, the Government's complete lack of competence in legislating leads more and more Landlords/Agents to reject HB tenants.
There is a difference between "scrounger, lazy b***rds" who know how to milk the system and people in genuine need like marital breakdown.
Guess who's to blame for the former! The Governments current and past making it too easy for a GENERATION to exist on and milk the benefit system.
I speak with almost 20 years experience in the property industry.
Love the phrase at the bottom of shelters website. "Every two min someone faces loosing there home". Wow, didn't realise every two min someone decides not to pay there rent !!, that's a lot lol.
I'm in the process of turning my 5 flats into offices. Had these flats along with the large retail area below them for 6 years. We have had a mixture of both private and benifit tenants over that time, and noticed an increase in problems since the change to pay tenants direct.
We have found a loophole that allows the council to pay us direct without the tenants permission, and if the tenant does get the first payment, we contact the council straight away and inform them that the tenant is in arrears and has not paid rent, they suspend payments and make all future payments to us.
Come April when the new changes are introduced and housing benifits stop for the new scheme, THAT is going to be an even bigger issue. And this along with all the other stupid new regulations and schemes that government are bringing in or talking of introducing is why we are changing the flats to offices.
This is the start of the snowball down the hill, wait till the ball hits the bottom, it's gonna be huge, and the housing market will suffer so bad.
I totally agree with all the comments, until the local authorities allow the Housing benefits to be paid direct to the landlord all the tax benefits they propose will not persuade landlords to rent out to those on benefits. My sister and I rent out properties in Blackpool and we have had only grief from tenants on benefit (apart from one who arranged to have the rent paid direct- he turned out to be a model tenant). The amount of grief landlords have had with benefits tenants, if it was all written down from all sources, would probably fill a library with volumes. Maybe some MPs should invest in property and then rent it out to tenants on benefit then they would understand that, in most cases, the real picture was not of greedy landlords but dishonest tenants (after all if you are paid an allowance for rent and you do not use it for that it could actually be termed fraud, even if not considered that in law, it is certainly not honest.) Local Councils might like to trust the benefits claimants to pay, but it is the Landlords which suffer the consequences. Until the Local councils understand this, the number of Landlords in the private sector willing to rent to benefits tenants will continue to fall steadily. That is the bottom Line.
It's not very surprising. I've let to people on benefits recently and it's a mistake I will never make again.
As Fartoosoft says, they simply DO NOT PAY. The excuses and deceit mentioned are all too familiar.
They know the system is weighed heavily in their favour and they certainly know how to play it.
We have over one hundred individual tenancies. I won't take any new benefit tenants (knowingly) now because THEY DON'T PAY. The five we have are all, without a single exception, 3 months in arrears with no intention to pay and have all been given notice to quit as of today, hurrah 1st Feb...now comes the hard part. Its a ridiculous system which is easily frauded,cheated, or call it what you will, but as it pays so little the tenant merely keeps it all and they tell you "mix up" "delay" "haven't been paid" you can't get paid direct without their permission, that is usually after they've kept 2 payments (8 weeks) intended for rent for you which at around £60pw ALL IN (room rent under 35 years) can never be caught up. Out of the entitled money LHA can claw back past over payments (I like the way THEY get their money back, we don't have that power without court and even then, no way of getting paid even with a successful CCJ. Tenants play that judicial system too).
One of the tenant in arrears had over £10pw taken off his entitled amount leaving just over £50pw WHERE CAN YOU LIVE ALL INCLUSIVE FOR THAT? I can't run the sort of HMO the government want and pay all bills includng council tax and licensing AND EARN A WAGE FOR HOURS WORKED on £50pw per person.
I'm about to write of £5900 on these 5 evicted tenants alone. I certainly cannot afford these losses and will NEVEtry to help anyone who is on JSA EVER again.
Government policy has caused this. The introduction of LHA and payments direct to the Tenants was the key reason the letting agent I worked for (for 10 years) decided to stop letting to benefit tenants.
Arrears have increased for BTL investors renting to benefit Tenants affecting them financially BECAUSE OF THE GOVERNMENT LEGISLATION RE: LHA
And BTL investors are being encouraged to provide accommodation to help benefit Tenants due to the chronic housing shortage!!!!!
Because of the current and previous Government's complete lack of understanding of the real world when it comes to the PRS, the company I worked for (managing some 900 properties in one City) reduced their HB tenants % from 52% to just 6% since the introduction of LHA. As those 6% leave they will be replaced with working Tenants/
I work freelance now as a BTL adviser and STRONGLY discourage my clients from entering the LHA sector of BTL. Years ago I actively encouraged them.
I told the local rent officer during a meeting a few years ago that the introduction of LHA payments direct to Tenants rather than agents/Landlords would increase arrears, discourage Landlords from letting to LHA tenants and put massive logistical and financial pressures on local councils.
I am sure that anyone who has an understanding of the letting industry reading this post could (and probably did) make the same predictions.
I despair!!!!
The reason we dont rent to council tenants is because they play the system and if they go to court they get legal aid so what do you do if you havent done anything wrong and havent got the cash to fight them! Britain should put itself to shame to allow for benefit tenants to treat landlords this way and also to allow them so many benefits when they know what they can get.