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TODAY'S OTHER NEWS

Discrimination against tenants on benefits?

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.

  • G romit

    Well said.
    The faux charity Shelter is taking the British people for mugs, duping them into believing they actually provide roofs over the heads of homeless people. In reality they only provide roofs over the heads of there own fat cat salaried staff paid out of the donations conned out of the general public.

  • G romit

    If Shleter are so convinced tenants on benefits are of no greater risk why don't they put they money (£15m cash pile of donations) to use and act as guarantor the such tenants?

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    Interestingly, Guarantors are a bit of a merry-go-round.
    Govt's How to Rent leaflet for tenants sign-posts them ( para 2 ) to Shelter if they need a Guarantor - stop laughing now, I'm serious, look up the H2R leaflet. !
    Shelter's web site says, if you need a Guarantor, go to the Local Authority, ... etc.
    No Shelter - a joke, put your money where your mouth is, ACT like a charity, paying your staff reasonable ages ( and No More ) and use you considerable funds to Guarantor Benefit tenants. I'm sure there'll be an overwhelming response from willing landlords. _ Probably wouldn't survive into another financial year though !!!

     
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    If this were implemented, this would be 'the final nail in the coffin' for the private landlord sector.
    Although, various governments have already legislated to reduce the effect of airbnb in certain circumstances.
    It should be the choice of the owner to whom he or she lets a property, not the government or any other organisation.
    It appears to be getting more like a socialist controlling state here every day, and that is under a Conservative government. God help us if Corbyn et al ever get into power?

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    heres an example,
    Tenant on benefits being evicted due to rent arrears , neighbour complaints regarding anti social behaviour , police visits etc. Tenant does not leave at end of Section21 Notice
    Housing Needs request not to put into court as the tenant has been allocated a new build. Meant to be due end of Sept but due to delays tenant gets keys 22nd Oct.

    This tenant should have been given Discretionary Housing to make up the rent shortfall and an overlap payment as the tenant did not fully move out until the 28th Oct.

    So the landlord bends over backwards to accommodates and gets shafted.
    No DHP and No overlap just an inv for 1 weeks money which had been paid from for the overlap week.
    Housing Needs what help did they give the landlord. The tenant did not get the correct forms or the information in the given time frame.

    Landlords are losing thousands in damage rent arrears and court costs.
    Insurance companies increase the premiums for Housing benefit perhaps Shelter can find out why?

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    I’ve posted numerous times in shelter Facebook posts slagging landlords off about 61% of benefits tenants being in arrears with average balance of £2400 owed (according to RLA stats)
    They just ignore the posts as they have no answer to this clear and severe risk .. I suspect they even make them invisible
    So their army of tenants and unemployed supporters don’t see this
    They are a disgrace

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    I'm very surprised you haven't been banned as I and many other landlords have been.

    Here's another one you might enjoy.... Go on to Youtube and find some of the Shelter videos, then post asking how many of the people in the video are paid actors.

     
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    I wonder what percentage of tenants are on benefits which arrive at the CAB and Shelter door?
    Perhaps Shelter could publish these stats. In fact I think they should be made to publish these figures

    I believe that it will be around 80% and many of the conditions on property ie black mould is due to the tenants not being able to heat the place or drying washing on rads.

  • icon

    I agree with everything said above, but as someone who spent 3 years of my early childhood with my parents living in one room as a sub tenant while on a council house waiting list I feel for the decent tenants denied homes hogged by rent dodgers defrauding the HB or UC systems. Why does Shelter not prioritise the decent homeless or over crowded over the feckless rent dodgers?

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    Robert, you've hit the nail on the head. Speedier eviction would re-house waiting tenants without rental properties either being empty or mis-used an unpaid for.

     
  • Paul Barrett

    The vast majority of HB tenants are good people.
    LL don't really have a problem with HB tenants per se what they really have a problem with is the dysfunctional HB system and the useless eviction process.
    The tenants and LL are both victims of these useless circumstances.
    I always discriminate against HB tenants because not one of them can meet my business requirements.
    In the past I had to evict 4 of them for rent default.
    The sad fact is for various reasons HB tenants for me are just not a viable business.
    As mentioned the issue of 'clawback' from a LL just because the LL was paid directly is simply scandalous.
    If the LL has been party to any fraud or deliberate misrepresentation of a tenant's circumstances then a case could be made in a court of law that the LL should have the HB clawed back from him.
    I doubt whether the DWP would ever be able to provide sufficient evidence to bring about a successful prosecution of a LL in such circumstances.
    Even if I did take on a HB there is simply no way I would EVER accept direct payment precisely because of the very real 'clawback' risk.
    The nearest I could get to direct payment would be the tenant using a CU to make the HB and other rent payments.
    There are so many issues against the HB SYSTEM and certainly too many to detail in this post.
    Shelter needs to drop the inane platitudes and attempt to address the dysfunctions within the HB and eviction processes.
    Then they would be doing something useful!
    It beggars belief that Shelter support S24 when it is obvious to everyone that this bonkers tax policy is causing so much homelessness.
    The damage to the PRS is in fact not total damage as about 50% of LL have no form of leverage at all.
    Consequently they can afford to risk things as they aren't sweating on rent receipts to pay a mortgage.
    30000 Properties are repossessed every year usually because of tenant rent default.
    Many leveraged LL operate on a just in time basis i.e. the rent comes in and the mortgage is then paid.
    Few LL have sufficient surplus funds to cover mortgage payments if rent isn't paid on time.
    The UC system has proven time and again that it just isn't functional for tenants and LL alike.
    I'm sure Shelter are well aware of these issues but they just carry on with the same old anti-private LL rhetoric.
    The issue is fundamentally ideological.
    That is Shelter would prefer the PRS didn't exist at all.
    They want a socialist nirvana where the State houses everyone and private property is banned.
    Such dopey ideology informs everything they do.
    If only Shelter would change their ideological stance and attempted to co-operate with the PRS they would find that most LL would support them.
    After all what good LL wants the rogues getting away with things?
    Just from a purely business perspective rogue LL are unfair competition to good LL.
    As such good LL want rogue ones driven out of business much like Shelter do!
    The UC system is broken which is why I will always discriminate for BUSINESS reasons only against any tenant who needs HB to pay me rent.
    All pretty academic though as my rents are double the LHA rate for my BMRA so I will never take on a HB tenant as I cannot make enough PROFIT from such tenants.
    UC tenants are a risk to my business that I simply can't cover and so I am forced to make a pragmatic decision not to let to HB tenants.
    I still can't get my head around the LL Catch 22 issue of when not letting to HB tenants being accused of discriminating against such tenants and then in the same breath being accused of taking Govt money to subsidise their business!!!
    I mean give me strength a LL can't win either way!!!
    Even if a LL accepts a HB tenant on UC there is a massive problem with the way that HB is calculated.
    That is the OBC has HB as the last benefit to be calculated within the OBC.

    In extremis a LL could receive as little as £0.50.
    It is clearly bonkers that Govt has designed the UC system so this is so.
    What they should have done is have HB as the first deduction within the OBC.
    This would have the magic effect of forcing the tenant to realise that having costly HB meant fewer other benefits to manage their lifestyle.
    A HB tenant then might realise that to enable more of their benefits being able to be spent on lifestyle they would need to reduce their HB costs.
    This would generally mean MOVING to a cheaper area or god forbid to overcome the OBC actually working at least 16 hrs pw!!!
    I know we don't want to stress the poir dears too much but Govt does make it incredibly easy to avoid the OBC.
    Just a little bit of plausible weekly work is required& but no the lazy HB gits can't even be bothered to do that!!!
    There are so many other dysfunctions too numerous to mention which are the reasons LL are withdrawing from the HB market.
    This is clearly a tragedy as TA accommodation costs far more than say paying the extra £150 pm that a LL would require as a market rent
    I know many councils are using DHP to paper over the cracks.
    DHP essentially drives a coach and horses through the Govt's alleged HB freeze.
    Politically though this can't be talked about too much as it would undermine a supposed major plank of Govt welfare policy.
    The facts are HB tenants are risky propositions and no LL can be forced to house a tenant type rhey would prefer not to house.
    I also refuse to rent to those who engage in highly noxious cooking due to the effect on the internal fabric of my properties.
    My BUSINESS my choice as to who I have as tenants.
    I observe all the protected characteristics of tenants and do not discriminate against those.
    It is illegal to do so anyway.
    The day I am forced to use my private capital to rent to a sub-optimal tenant that in my current opinion a HB tenant is will be the day I leave the PRS.
    Ad a matter if fact I will be anyway due entirely to the pernicious effects of S24.
    So that will be about 14 tenants homeless in about 3 years time.
    None of my tenants can afford or would even want to buy their rental properties.
    Very few LL will want to buy.
    So that will be another 4 properties removed from the lettings market.
    Well done Osborne and Shelter for supporting the idiot Osborne policies.
    Between you 14 tenants will be made homeless!!!!



  • Gary Yeardley

    Why don’t Shelter offer to stand as guarantor to tenants claiming benefits- they’ll soon change their position.

    Applying for a house is like applying for a mortgage or credit card. You wouldn’t be looked upon favourably if you’re unemployed with no income for those, so why should it be any different when applying to rent?

    Private landlords are not charities offering free housing, they’re investments and pensions for most (accidental landlords too), and as such, they need to assess risk to reward.

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    And unlike a credit card or mortgage, which are limited from the start, or any other unpaid line of credit (such as an unpaid Sky bill) where the flow of service/goods (i.e. credit) is no longer extended, landlords do not have such luxury or access to instant cessation of credit extension. We are forced to allow the tenant to remain in situ, on tick, until a protracted Court process is complete and only then if the Court are in agreement to the termination of the tenancy!

     
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    Gary, see my post to Gromit's second comment above, about the farce of Govt's How 2 Rent leaflet sign-posting tenants who require Guarantors to Shelter, - who promptly - sign-post / divert them to the Local Authority. 'Money where mouth is' comes to mind. for No Shelter.

     
  • icon

    How many landlords on here buy from B&Q? Did you know they actually sponsor Shelter. I go out of my way to use Wickes and any alternative and would encourage others to do likewise. The irony of this makes you wonder re Shelters aims but you have to hand it to them it’s a genius move to demonstrate their hatred towards landlords

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    Spot on Jahan, But also, How many Landlords have mortgages with Nationwide, Insurance with Legal & General, shop at M&S etc

    I've asked the Landlord Alliance to publish a list of No Shelter's sponsors, so landlords can be more informed.

     
  • icon

    Leave housing benefit claimants to the local council to home , their problem, not mine.

  • icon

    Simple Rule: Do not take Any persons on Universal or Housing Benefits.

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    Why do you think the Govt would never allow a Rogue tenant database of Defaulting and damaging tenants. ? - because None of them would be Housed in the PRS and Local Govt would have to pick up the tab. Easier and cheaper for L.A's / Govt to let them ming-mong around the PRS with Anonymous ease.

    Paul Barrett

    There is already a national database of good and bad tenants.
    Called
    Landlordreferencingservices.
    If every LL uploaded their good and bad tenants to the FREE LRS database then no LL would need to take on a duff tenant again.
    Problem is few LL deign to use LRS even though it is totally effective.
    No need for a Govt database.
    LRS is a free national database.
    All LL should use LRS.
    That would leave the Govt to house all the tenants that LRS has identified as duff.
    Network referencing is the key for LL to communicate with eachother.
    It is the only way to defeat scammer tenants.
    No need to reinvent the wheel LRS has existed for about 10 years now.

     
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