Universal Credits

[caravanj]

The new system of universal credits which will replace a lot of the existing benefits & tax credits, including housing benefit, is being introduced from 2013 onwards for all new claimants & all claimants will be on universal credits by 2017.

Under this system claimants will be paid all their universal credit money into a bank account on a monthly basis & since housing benefit will become part of these payments, landlords won't get rent money paid to them directly by the local authority.

Concerns have been raised that a lot of the universal credit payment recipients will struggle to manage their money on a monthly basis so we all know what won't get paid & it won't be the booze & fags!!

[Grampa]

Or wide screen TV's.

[Richlist]

So why do people continue to let to benefits claimants ?

Seems to me its much higher risk with lots of problems, everyone is on the tenants side and virtually nothing positive for the landlord.

Is there something I'm missing ?

[Grampa]

I have a number of landlords who preferred tenant issomeone on benefits. Also you can sometimes achieve higher rents and as an agent one of my jobs is to get the best return for the client. Also as we are based in a village area we don't have the same pool of potential"professional" tenants as a big city so the empty periods would be a lot longer andrents possibly less.

I have one landlord who has 12 flats in one block. A true rent for the flats for a working tenant is about 495-515 but we get 575-600 as they are all long term HB tenants. There has also been a 100% occupancy rate for the last 2years+.

We have refined our referencing and the type of benefit tenants we take to reduce any risk and have an excellent relationship with the housing team at the local council. We are also pro-active in dealing with late payments and other issues as they get a very stern letter (some say too stern) and we also get the housing officer to call them. Most HB tenants now have a guarantor who also gets a call or letter requesting payment when needed.

We have very few problem tenants nowadays; maybe about 5-7 out of nearly 300 properties and some of them are now on payment plans.

Though I may threatened eviction occasionally and serve a few s8 & s21 to give the tenant a kick up the backside I haven't had to follow through fornearly 2 years other than for landlords who have got themselves into a pickle while self managing and have come to me for help.

The universal credit system coming up may change the way we work but I think there will be a few more amendments to the law before it fully comes into effect.

[Richlist]

Thanks for that, very interesting.

So, perhaps the reason that we seem to get a higher proportion of problem posts (on most of the landlord chat forms) about benefits tenants is that private landlords lack knowledge & experience of dealing with benefits tenants.

Given the choice, I'm still gonna steer well clear of that category of tenants.

Your business is safe......for now.

[Grampa]

I was lucky (though it didn't feel like it at the time) in that when i first got into this business and brought my first agency with about 30 properties most the tenants were on HB, no deposits or inventories and poor quality tenants so got thrown into the deep end and had to learn the eviction process and the HB rules and regs. (with a great deal of help from the Guild of Residential landlords). I do think the councils should send some guidence out to landlords of HB tenants on how to deal with the most commmon issues because what happens is landlords let the problems go on for such a long period of time before dealing with it, it then ends up with an eviction and that landlord never taking a HB tenant again.

You hear a lot about the downsides to HB tenants and it isn't for the novice landlord but the pro's can be:

1 Potentially longer term tenants

2 Higher rents

3 No deposit to protect if you use the the council deposit bond scheme.

4 The council can help where issues arise.

But all said and done, if I was based in a city and had a larger pool of potential working tenants would i still take HB tenants? The answer would be yes but maybe not so many.