Shelter has recently run a campaign aimed at banning ‘discrimination’ against tenants on benefits in the private rented sector, presenting a complex issue as though it were black and white. This was even picked up this week in a report by the Institute for Public Policy Research as something which should be legislated against.
As a landlord, however, who is running a business and not a charity, I believe landlords should be able to choose which tenants they accommodate - within the bounds of the law, which currently does not include being on benefits as a protected characteristic and should not do so for many reasons. Landlords must be allowed to mitigate their risks; and a charity like Shelter which houses no-one, but constantly slags off those of us who do, should not have a role in dictating how housing providers assess affordability, under threat of litigation.
It is of course easy for a third party to tell someone else to take risks that it does not and would not itself take. Shelter’s employees and directors do not face having their livelihood put at risk; they get paid whatever decisions they make in the course of their work. On the other hand, full-time landlords whose profit is their salary do not have the luxury of still receiving this salary if they take or are forced to take additional risks when deciding whom to trust enough to hand over the keys to their expensive assets.
In this context, it was ludicrous of Greg Beales at Shelter to state that tenants on benefits pose no more risk than say a couple in full-time employment. Of course they do.
For example, last year we heard of a case where the landlord potentially faced having to pay back four years Housing Benefit as the tenant had claimed it fraudulently. What other business would take a risk like that? The landlord would not face this risk if they accommodated only people not on benefits. Shelter has no answer to this point.
In fact, landlords face numerous problems in housing the lowest income tenants, and there are exacerbating problems when they are in receipt of benefits.
The following landlord who has often accepted tenants on benefits sums up many of the issues:
‘What about if Universal Credit is stopped because of something the tenant does? The landlord cannot control the tenant’s behaviour. What about when tenants spend the rent on other things – as some of my tenants have done? Or when they are overdrawn at the bank and the benefit is swallowed up?
What about when things go wrong and there is no guarantor? I’ve had tenants cause thousands in damage and arrears – I can’t get a penny back when they’re not in a decent job where I could get an attachment of earnings if they were working. What about when the council and charities like Shelter and the Citizens Advice Bureau tell tenants to stay put for several months, even when they are not paying the rent and their notice has expired?
Again, landlords lose thousands. And unless the tenant gives permission, the Universal Credit employees won’t even talk to the landlord, who is paying the mortgage and all the maintenance costs, insurance and so on. And in the meantime the charities support even terrible tenants against decent landlords – they assist these criminals in ripping us off, giving them free legal advice and representing them in court – always looking for loopholes, tiny issues with paperwork, to keep them even longer in the property, whilst the landlord can get further and further into debt.’
Of course, Shelter also supports the government’s tax assault on landlords which has seen many face huge increases in their tax bills. Portfolio landlords who have until recently had large portfolios of relatively cheaper properties, with large amounts of mortgage interest to pay, who have specialised in housing those on benefits are pulling away from this market; not only because of the tax assault, but also because of constant criticism of them for ‘taking tax-payers’ money’ in the form of Housing Benefit.
If Shelter wants private landlords to return to this sector, they should be taking the diametrically opposite approach to the nasty, litigious one they have initiated. What about them campaigning against Section 24, arguing for a public body to indemnify landlords against the additional losses and risks associated with riskier client groups? That would be of real value to tenants who because of government and charity interference, now face the possibility of not finding anywhere to live.