No Home Comforts for Those on Housing Benefits

I’m reluctant to publish guest posts, but this excellent article written for me by Alex Murray of Safesite Facilities neatly encapsulates my experience on the front line of accommodating housing benefit tenants. There’s an additional, heart warming story at the end to prove landlords aren’t all inflexible, greedy sods.

No Home Comforts for Those on Housing Benefits

When “non-smokers only” started appearing in property-to-let listings in the UK, it was widely acknowledged as positive action which directly reflected the attitudes of British society and its wish to be free from the stench and alleged ill-effects of smoking.

Fast forward to 2014.  Although “non-smokers only” still appears, another two words, which first crept in during 2008, have begun to take prevalence.  Again, two little words which are accommodation-ad specific, but once more seem to represent the attitudes of a society  seeking to free itself from something seen as negative, pervasive and pernicious:

“no benefits.”

Sadly though, this advertisement addendum is far from a positive reflection on 2014’s British landlords and society.

How did it come to this?

Since the coalition came to power, the days of government and public benevolence or relative even-handedness towards those claiming benefits have been numbered.  Along with the government, much of the British media have stood in line to condemn benefit seekers as “lazy” or “scroungers” whilst fly-on-the-wall documentaries such as Benefits Street seek to demonstrate to the remaining public who display a live-and-let-live attitude towards others that they might be misguided in not jumping on the judgement band-waggon; after all, an alternative programme title might have reflected the difficult cycles some vulnerable families find themselves trapped in, but no, Channel 4 chose Benefits Street.

After the frosty reception which greeted their plans for the Bedroom Tax and the on-going disability benefits and ATOS Work Capability Assessments (as in don’t give ATOS) debacle, the government then rolled out its Universal Credit scheme nationally in October 2013.  This scheme replaces, amongst others, the long-standing housing benefit and involves making single monthly payments directly to claimants.  From this, claimants are expected to make their own rent payments direct to their landlords.

Government Assurances – for the Landlords

Although the government is adamant that Universal Credit gives landlords greater protection from tenants who fail to pay – review of payments kicks in after just one month of arrears – this hasn’t been enough for landlords.

A recent survey, conducted by SpareRoom.co.uk, revealed that landlords have lacked confidence in the government’s systems for handling benefits, largely since the introduction of Local Housing Allowance (LHA) within the housing benefit system, in 2008.  This change, which also allowed payments to go direct to tenants, was identified by 88% of landlords as having a negative impact on their businesses, through late payments and damage to their property.

With their confidence, revenue and portfolios already shaken from LHA, 6 out of 10 landlords (57%) state that they now refuse to accept tenants on benefits.  Of those landlords still willing to take housing benefit claimants as tenants, over half plan to will stop when Universal Credits become fully functional (around 2016) and several large property investors, including Kent property tycoon Fergus Wilson, have already served eviction notices on current benefit-claiming tenants, as reported by the BBC.

Assurances for the benefit claimants?  Anybody?

With low levels of social housing stock, eviction notices in hand, the “no benefits” banner across the rental sector and the benefit shakeup generally causing unknowns for those finding themselves claiming benefits (including reliable, responsible, hard-working families and pensioners), what hope is there for those relying both on benefits to make ends meet and the rental sector for a roof over their heads?

In truth, not much.

Whilst the landlords can gain the same (if not more) money by letting their properties on the open market, housing benefit claimants have no alternatives, just further belt-tightening.  This is inevitable as any landlords still willing to rent to them increase rents to match their own increased “risk” and to pass on their additional buy-to-let mortgage and insurance costs, which have risen considerably for landlords renting to the benefits sector, as many buy-to-let lenders also coin in extra cash from others’ misery.

As Matt Hutchinson, the director of SpareRoom.co.uk reflects: “the rollout of universal credit is set to make the situation even worse.   With rents rising and the welfare budget suffering from further government cuts, the outlook for tenants reliant on housing benefit is getting bleaker.”  Not only that, but thanks to the divisive “no benefits” mentality pervading the rental sector, the outlook for our prospects as a cohesive, empathetic society looks pretty bleak too.

Thank you, Alex.

55p and a Cat Called Bill

A couple of weeks ago, John contacted me through a friend.  An eloquent, skilled barber who had numerous men’s grooming awards under his belt but, following a breakdown, had been forced into sofa surfing whilst trying to get to grips with his own recovery.  How easy is it to recover your self esteem when you’re sleeping on a lumpy sofa in someone’s living room, with no privacy or hot water?  His only stable, trusting relationship was with Bill, a nonchalant black and white cat who clearly has no idea he holds his master’s wellbeing in the pads of his paw.  All John had to offer was 55p in his pocket and a promise that Bill wouldn’t pee in Jim’s newly planted containers.  All I have to do is to help him fill in the forms, wait around 5 weeks for the claim to be processed and I will hopefully have 2 very happy, contented, mentally stable tenants for a long, long time (and I get to stroke one of them).

18 Comments

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18 responses to “No Home Comforts for Those on Housing Benefits

  1. Gillian Keef Filnthouse Designs

    Most interesting, well done. How easy it must be to get into such situations and how hard to recover. You must like the owner of bill and trust him, think he is a friend of Jenny’s isn’t he. X

    Sent from my iPad

    >

  2. Smithy

    My issue with HB is that it can be withdrawn at a moment’s notice – and not necessarily for any discernible reason.
    I have a long-standing tenant (22 years) who has had her minimum wage earnings and more recently her pension, topped up by HB. Over the years I have lost count of the number of times her HB payments have been suspended.
    On one occasion I had doubts about the amount of the payments, queried it with the HB office and even involved our local Councillor. We were told it was definitely ok – but subsequently they decided it wasn’t, and she had to repay several hundred pounds at £8 per week for ages.
    Very recently we received notification that she had been overpaid an eye watering £2,406. (Her rent is £125 pw.) And since the money is paid directly to me, they would look to me for repayment. A few weeks later, they decided that they had not overpaid – they had actually underpaid, and sent me £458.
    It’s a similar story with my other HB tenants and so I don’t blame some landlords for wanting to avoid HB altogether.

    • Hello Smithy. Thank you for sharing your experience and I should have included the issue of inconsistency with housing benefit payments. I, too, am reluctant to base my calculations on their letters after I received one envelope containing a letter saying a tenant’s benefit was to be stopped and another letter to say it was being increased! I just waited to see what appeared in the bank account

  3. Jane Macswayne

    I have every sympathy for people on benefits but have a query on how you make the numbers work. I currently room let to working people with average weekly rent of £100 inclusive of all bills. People on benefits would normally only get £70 towards their rent and have to take remainder out of their jsa which is doable but if not working they are in all day using heating. Do you just accept this is how it is or am I missing something? Thanks

    • Hi Jane. I have a certain number of rooms set at the housing benefit level plus a small top up. Depending on their circumstances, some tenants can claim the entire room allowance of, say, £100 a week but this is a complicated process and between the tenant and the council. Therefore, I like to play it safe and offer them the affordable rooms of £75-85 pw. The LHA pays £68 pw and the rest is covered by their income support/JSA/ESA, etc. I know these terms are changing but I’ll stick to the old ones for now!

  4. Simon

    The “no benefits” mentality is the practical consequence of stigmatising ordinary people, whom are struggling with ordinary life problems i.e. relationship breakdowns,
    employment issues and
    central government social re-engineering.

    A good tenant, is just a good tenant.
    Not necessarily a worker or a professional.

    Any responsible person with motivation, can still be a paying tenant. However, I do accept, that the welfare environment is making life very much harder for any tenant reliant on Housing Benefits/ UC and or Tax Credits or I/S, JSA(IB) or ESA.

    A bad tenant, is a bad tenant because they make the wrong choices. Whether they are working or not.
    Not paying the rent, still means rent arrears.
    Destroying the furnishings will still mean a landlord cost – in cash and time.

    Good luck, John (& Bill the cat).
    A great article.

    • Dear Simon. I absolutely agree and hate it when housing benefit are viewed as unwanted. I’ve had equal amounts of bad and good tenants regardless of whether they’re working or not. This is why I liked Alex’s article which is matter of fact, doesn’t play the sob story and points out the new reality. John and Bill are very happy and their housing worker often pops over for a cup of tea.

  5. Tom

    It’s not just landlords’ prejudices behind “no benefits “. Many BTL mortgages and insurance policies preclude letting to DSS tenants.

    • You’re absolutely correct, Tom. and I can only presume its based on a deep seated prejudice rather than research.

      • Colin McNulty

        I was looking at an insurance policy and noticed the “No benefits” clause. I called the company and asked them, what should I do if my working tenant lost his job and had to go on benefits?

        Their answer: You must evict the tenant as your insurance is now invalid!

      • Hi Colin. Madness isn’t it? Why don’t the insurance companies understand that a house occupied by someone out of work is less likely to be broken into!

  6. This is a really insightful article. It’s not surprising that landlords have lacked confidence in the government’s systems for handling benefits. But I think the whole situation is such a shame and the scheme that involves making single monthly payments directly to claimants seems crazy. Rather than claimants making their own rent payments to their landlords surely it does make more sense for the money to go directly to the landlord?

    • Hi Anna. You are absolutely correct and it is a shame but the issue also with sending payments direct to the landlord is, if the tenant’s circumstances change and the benefit needs to be claimed back, the council will pursue the landlord. Some tenants really are unable to handle their own finances and I’ve just had one little toe rag spend ALL his HB money without passing it on to me. He’s just received a Section 8 Notice and it will have to go to Court. I think you have to look at it on a case by case basis and you can insist on direct payments if the tenant fulfills certain criteria. Thank you for reading!

      • Colin

        Some options here: You can use Tasker Payment Services, it’s like a credit union account, which is in the tenant’s name (so no clawback from the council) but they send the rent direct to the landlord.

        However I’m also lead to believe that clawback claims can be successfully challenged.

        I also had a tenant nick 2 months worth of HB and drink / smoke it, I decided to keep him rather than issue a section 8, and he’s working off his debt, e.g. he repainted one of the other tenants moved out and I knocked £60 off the debt. Just a thought.

      • Hi Colin. That’s a good idea and can work if you have faith in that tenant and they decide you’re their last chance saloon. We too have had someone spend the last year paying off their arrears and they’re now fairly loyal – I hope!

  7. Pingback: Benefit Tenants – The Reality of When It Goes Wrong | A Practical Guide to Managing a House of Multiple Occupation

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