High profile landlord Fergus Wilson hit the headlines at the weekend when he explained to The Guardian why he would no longer rent to tenants on benefits.
The story was the most read story on The Guardian website for most of Saturday and attracted more than 5,500 readers’ comments. It was followed up by other media including the Daily Mail and the Daily Telegraph while Wilson appeared on both BBC and Channel 4 News.
The Kent-based landlord said he would be evicting his 200 tenants on benefits, accounting for about a fifth of his 1000-property empire in and around Ashford. He said Eastern Europeans made better tenants.
He told The Guardian: "Tenants on benefits are competing with eastern Europeans who came to the UK in 2005 and have built up a good enough credit record to rent privately. We've found them to be a good category of tenant who don't default on the rent. With tenants on benefits the number of defaulters outnumbers the ones who pay on time.
"Single mothers on benefits have been displaced to the bottom of the pile; sympathy for this group is disappearing. There aren't enough places for people to live."
On Monday night he told Channel 4 news the decision was purely based on financial reasons, and that rent arrears were running at more than 50% in the homes he let to those receiving benefits.
His comments caused on outcry and reignited warnings that some areas of the country would become “benefits blackspots”.
Affordable housing campaign group Priced Out described Wilson’s decision as “unbelievably heartless.”
Wilson's comments comes after figures from the National Landlords' Association published in December, which showed that the number of private landlords letting to people on benefits has halved to just one in five.
George Spencer, chief executive officer of online lettings company Rentify urged landlords to consider the implications of such blanket bans on those receiving benefits.
“Not only could they significantly limit your chances of finding new tenants, they could also lead to public outcry, a backlash against landlords and further regulation,” he warned.
“Under the current Housing Benefit system, the amount a tenant can receive is based on the cheapest 30% of properties in the area. This means that 1/3 of homes in your area should be affordable to those on benefits. If your property is in that bracket you should have a large market of benefits tenants available to you. Of course, this becomes more cloudy under Universal Credit where the tenant receives one lump sum for all of their benefits and must budget accordingly.
“The big worry is that landlords (generally) will not receive rent directly from the council, creating more uncertainty. But there are still many things landlords can do before bringing in a ban on benefits tenants. And each case must be judged on its individual merits.”
What do you think? Should private landlord ban benefits tenants? Let us know below.
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Comments
Many people let property as an investment, if tenants are not paying the rent then the property is not much of an investment. I, with my sister, have property rented out to tenants, again HB tenants have often been the problem, sometimes I wonder if the best option is to sell the property and buy physical Gold, it would be much less hassle and Gold eventually goes up. Mr Wilson is right on the ball, the HB tenants are the problem, solution no HB tenants, simple, if the councils paid the rent directly to the Landlord no problem, maybe the HB tenants wont be able to get the best upgrade to their I pads or computers or afford to go to the boozer every night, it is a case of priorities, priority 1 is getting food priority 2 is having shelter, priority 3 is getting the luxury items , a lot of HB tenants do not want to grasp this social responsibility, actually if you think of it if the council pays money to the benefits claimant for rent and food then to spend it on luxuries is technically fraud. Who is to blame for HB tenants not paying the rent? (1) the tenants, as they chose not to budget responsibly and pay the rent due to the landlord (2) the Councils / Government for giving the money direct to the tenants who do not want ,or know how, to use it responsibly. When the tenants get into arrears the Councils wash their hands of the matter and tell the landlords it is not their responsibility whilst encouraging the tenants to draw things out as long as possible causing the maximum expense to the Landlord. Councils and Governments should get real, of course Landlords are not going to rent out to HB tenants if those tenants don't pay, change the regulations so the Landlords are guaranteed the rent owed and HB tenants may again be welcomed, it is that simple, it is not rocket science.
The coalition are cutting benefits left right and
Centre which means any money tenants get
They will never pay landlords but the local authorities
Are giving hbenefit again to people on benefits
Then the local authorities are saying we have been cut
Get nick clegg to come to live on edlington doncaster fir a day not far from sheffield. The country is going
Down hill and lib cons don't actually care no system is
Working everything is leading to poverty and a 3rd world
Country. Giving a tenant 900 for two months
Who has never worked or paid task is an absolute
joke.
A possible solution...
Many Credit Unions run schemes to help members to budget and reduce the risk of getting into debt. The person on benefits becomes a CU member and opts to have their payments paid directly into their CU account.
The CU then have a system where the rent is paid before any other money is released to the member.
As an alternative to eviction, landlords could give HB tenants a choice... join a Credit Union and get onto such a scheme. Rent Deposits can also be handled by Credit Unions as a loan I believe.
Could Landlord Today do an article with more detail about this?
The biggest issue here as in nearly every person who's commented is the direct payment of rent to the tenant.
Lovely theoretical stuff about giving the tenant responsibility of managing their money, we all know they can't.
Been there done it!
had good HB tenants but as soon as the law changed then it all went to pot and costings loads in un-paid rent before they finally leave.
SO the answer is NO more HB thanks.
And as said before it's a business to us landlords not a charity.
I agree with you "p Greenford".
I know people who rent and it infuriates them to have benefit lodgers who dont pay. That is a form of squatting.
Why do we have Government ? it is to "Govern". But if you do a bad job you are fired. Government and their closest pals the banks do a terrible job and dont get fired. Voting differently at the moment is not "firing" a Government, just chaning from Labour to Conservatives makes no difference.
I dont beleive that the Conservatives if they were in power would have put the brakes on. This was all bank led from here and the USA where the major banking influence is based.Why were the banks were de-regulated in 1997 ? it has been open to abuse by the banks since then.
We have a serious problem in how the economy is managed. People work harder for less of standard of living. I am old enough to realise that things were better and there was less government interference.
We dont need government to trample over everything. They dont just regulate everything so the rich few can play and to pander to globalisation, they also ruin the basics ! and that is how we live.
Because governments are a business they act on self protection, lie about what they will do and deny what they have done.
We need a different way to run the economy and the country but the change would be possibly radical but may be best for the future generations.
The government stopped building social housing. If they had carried on then fewer private landlords would be housing those on benefits.
So it is terrible to think of a poor family on benefits being kicked out. But if the landlords of the country kick all the bad benefit tenants out on the street then these are the worse to have nocking around homeless. So Government will have to build more social homes for them, because those lucky enough to enjoy life and live in the warn wont want to be mugged going to work or going out in the evening.
Homelessness will increase.
And the Government will blame it again on something else. Its the banks and government.
Take away the major control from the banks and government, I think we would be better off with them playing a smaller roll in our lives and their experiements that may ultimately cost us all our freedoms.
We are sat on enough energy
Unfortunately, since squatting has become criminalised- people who cant or wont pay rent really have nowhere to live anymore. Inevitably, they end up in rental accommodation where occupation without paying is not 'Squatting' and therefore perfectly legal because the Landlord provides them with a tenancy agreement.
Or doesn't - ever since the councils stopped paying rent direct to the landlord.
Not sure where the rocket science bit is in all this.
TO ADD TO MY COMMENT BELOW !! - I PUT THAT "I AM TALING OF COMMUNISM" - I MEANT TO WRITE "I AM NOT TALKING OF COMMUNISM.
GOVERNMENT SHOULD BUILD MORE HOMES !!
Tthe government have turned their back on the poor recently by blaming and punishing those on benefits on the ill health of this country.
THE BANKS AND THE GREEDY RICH RUNINED THIS COUNTRY and a good part of the rest of the worlds economy.
So you want to be rich and have all the poor fall into line. Have you tried to live on benefits ? of course you will fall into arrears on rent when on benefits.
Stop blaming the poor and weak. As a society you need the poor to do the jobs the rich wont do.
So if you want the poor to mug the rich to survive or camp outside parliament until they provide them the basics of life.
As a society many go through good and bad times, wealthy one year poor the next. I have paid hundreds of thousands in tax over the years, employed up to 12 staff at a time and now i am unemployed trying to get a business going living on friends sofas for nearly 6 months.
You take the crap with the cream. You want to make money from society then you handle the poor, the sick and the weak. Dont make them live on value tins of beans and live in the cold.
Not everyone fits the society model, they should not be punished for that. And not all who are poor are useless.
There is a growing divide in the country.
And guess what - it is based on property prices.
What keeps property prices up ? - supply and demand.
The government does not build houses as it wants to help the rich get richer and so by not building homes it restricts the supply of houses. So its the governments choice that their housing benefit bill is so high !!!
Be honest government, tell the poor and weak who cannot work or cannot find work to dispose of themselves quietly and with mininal mess.
Or you could do the right thing. STOP a debt driven society that will make us all bust. Stop basing the economy on house prices and makin gth erich richer. Stop the control of the banks and underwrite the economy with real assets (like we used to with Gold). Stop protecting the banks. They do not make the majority of the workers in this country. Stop rewarding the banks and stop the smoke screens. People on benefits are not to blame. Even some of the benefit cheats. If you were on benefits for long you would consider cheating. What is worse the banks ripping the world off or benefit cheats ? benefit cheats do it out of desperation (most of them i suspect not the ones that hit the news for multiple frauds), banks do it out of GREED.
Politics is a business. The business of polotics does not work for the country it works to serve itself.
We need a radical change in the worlds economies. And when when World War III hits when China gets pissed off with the fact that their US Bonds are backed by thin air then they will start to get very agitated !
But back to the UK. Anyone homeless should decend on parliament and set up tent city outside. When some one dies from the cold or disease by malnutrition then put them at the front gates of parliament.
it is that serious. If government dont change the basis of the economy by chaning the banks and by building more homes and allowing house prices to fall then the poor will revolt agains the wealthy. Remember the anti capitalist demonstrations some years back ?
I am talking of communism. I am talking of a fair society by considering what is fair from the outset. And the root of the system is disgustingly unfair.
Dont keep house prices high deliberately to get votes ! just to keep power. Dont blame those on benefits for the economies downturn, its the banks and its the greedy. if you dont build more houses then house prices will remain high, and private landlords will be relied upon to house people at larger cost and so the benefits go up.
See how government have actually perpetuated an increase in benefits costs themselves !!
So now the poor have to suffer and the result is a sponge soaking money and opportunity from the poor and giving it the wealthy and the home owners again.
So yes - private landlords throw out your benefit tenents, and then those tenents descend on london and sit outside parliament until the change it. And watch the blood shed ensure from police action. And then will the lucky of this country not fear what is going on and realise what it is really all about ?
If you are a banker or an MP then imagine being hungry, homeless and cold. Very cold. So now what will you do ? will you fall in line and die on the streets ? or take unsafe accomodation and a bowl of soup and think thats great ? or after you have been raped, stolen from or beaten up in homeless hostel then would you may be think about mugging someone, or breaking into a home and squatting ?
To reflect on such things is called Empathy, try it.
Dont blame the many for the few, yes some Nigerian ripped the state off on benefits while living in luxury. most people want to live, eat and be warm. Even now in the 21st C many many many do not have this in the UK. And we thin we are civilised.
Also the Energy companies !!! dont get me started.
This is not to incite any action, it is all my opinion. But its going to get much much worse in my opinion. And leave us all utlimately poorer, financially and in spirit. Then people and governments turn to desperation. Government has too much power.
Dear GB - Ditto
I have had tens of exactly the same experiences and the councils and the judges tell them they don't have to move despite issuing the notices. The pricks aren't losing their livelihoods sitting there playing god with our money.
Hurrah for Fergus Wilson! As a landlord and letting agent I am getting increasingly frustrated with the local council in the way they disregard landlords. The majority of tenants on benefits are not a problem but there are an increasing number that are. They have no self respect and live in their own self inflicted squalor and when they are asked to leave they just run to the council who tell them not worry and wait for the court order. When that arrives the council kindly advise the tenant to wait for the bailiff. All the time this is costing the landlord time and money. Do the council care? Do they ****.
We had a case recently where the tenant trashed the place including smashing windows, smashing the oven door, food stuff (I think) smeared on the walls and putting a foot through the bathroom door. They were still living there by the way. We then got a letter from a council enforcement officer telling us that the tenant shouldn't be living in these conditions and ordering the repairs to be done.
As a national journalist likes to say. You couldn't make it up!
Dear Industry Observer re (thick end £300 million)
You maths may be a little "thick ended" and your attitude may also be lacking. How on earth can he be worth £300,000,000 when the average property (he has 1000) price is £175,000 and he will have a vast percentage mortgaged?? At 60% LTV he might have £70 million in equity.
Attitude - why does he bother, well this needs no explanation to most hard working successful people, so take a wild guess as to why he bothers.
200 tenants don't pay rent for 1 month at £800 cpm
Thats £160,000 a month and if he goes through the appalling system every one of us landlords has to, to get rid of these non paying parasites it takes 6 months,
thats £960,000 exclusive of the massive costs and the redecorations he will have to do on each property to get re let.
A million five hundred thousand LOSS is a very conservative figure.
Tell me thick end, how long would it take you to make a million five hundred thousand?
A clear example of another failed Labour policy to socially engineer things by paying those who can’t cope their rent and give them the responsibility to pay it to the landlord.
Here is a multiple choice question
If a long term DSS tenant gets £1000 paid into their bank account for their rent
Do they
A. Buy a new flat screen TV?
b. upgrade their mobiles and TV subscription?
c. buy iPads for the kids?
d. drink and smoke most of it?
d. pay off any other debits they have?
e. go for a wee well deserved break somewhere?
f. pay their landlord the rent on time?
Answers welcome
With no consequences at all, a lot of these people choose to abuse the system, landlords and others, knowing the LA’s will rehouse them eventually and with the LA’s encouraging them to stay put whilst the poor landlord tries to get them out over a six month period, well its party time each month with a wad of cash to spend.
Idiotic and moronic policies from people using those that can’t/don’t/won’t cope, as their voting electorate all the while enslaving them. What a total mess we are in and no one will admit it.
Thanks politicians, I too will never take on another DSS tenant ever, they have all been in my experiences, a hugely expensive and abusive nightmare, much like our politicians and many council people and policy makers who have destroyed the social fabric of GB.
Give me an employed person or a Pole any day
They have a sense of whats right and wrong and do not expect to be rescued their whole lives.
Taking responsibility for where we are and all of our actions is the bedrock of a successful society, the UK lost that many years ago. So sad!
As he's worth thick end of £300M why does he bother?
I whole heartedly agree with Fergus Wilson and cannot see why Kent County Council in particular seem to expect private landlords to subsidise the housing allowance system and tenants who spend their benefits on non essential items.
I would expect that his decision would reverse however if the rent payments were made directly to the landlord as they used to be.
Being a Landlord means you are running a business. If say, you ran a different business and someone consistently didn't pay you may well take the decision to not deal with them anymore. Mr Wilson has had that experience of HB tenants and has made a sound business decision. Good luck to him! The issue though is not really the tenants, it's the way the Government and Councils behave in making things difficult for the Landlord. Universal credit is a crazy idea, designed to cut down Government costs but without any thought (or maybe lack of concern) for the Landlords. The only tenants I have that are in arrears are HB so that tells a similar story to that of Mr Wilson. I've also had the Council pay a £400 cheque to a tenant that should have come to me. He didn't pass it on so not only did I not get the rent but was also faced with all the costs of eviction. Mr Wilson I take my hat off to you.
Hi
Its not just landlords that take this view regarding benefit claimants. I have several HMO properties all with mortgages and all council licensed and it has been part of my mortgage conditions that I cannot rent to tenants claiming housing benefit.
I stopped renting to benefit claimants when they stopped paying the rent direct
Before that they made up 70 percent of my tenants.
It's all very well saying have a social conscience but when u don't get your rent the mortgage company quiet rightly doesn't care.
Why would u rent to someone who cannot prove a decent income?