Five years ago, the prime room rental market was students and people in receipt of Housing Benefit. Put an ad in the paper and 9 out of 10 respondents were those on housing benefit – probably a key reason that so many fellow landlords stuck their nose up at me saying I was “mad” and “do you want to make life more difficult for yourself?”.
Housing Benefit vs LHA
I liked Housing Benefit claimants: they tend to stay longer, were satisfied with their environment and, as they were home much of the day, kept an eye on the comings and goings of the house. Once you understood how the system worked, the claim process was relatively straightforward: upon production of landlord evidence of a room offer the tenant would approach our local Housing and Legal Aid Centre and a cheque for four weeks advance rent was made payable to the landlord. The tenant would then fill in their part of the claim form and the landlord would fill in the other parts including their bank details for the benefit to be paid into. We’d sit back, wait and within 4-6 weeks the rent was paid direct into the landlord’s account regularly. If there were any queries, I’d call the Housing Benefit team (I knew each agent by their first name), find out at what stage the claim was at or if they were waiting for any more information so I could chase the tenant.
Under the LHA system, the process is no longer so transparent. The tenant can make the claim, the landlord fills in what’s included in the rent and, even though the tenant signs permission for the landlord to discuss the claim, that is the last I’ll see or hear until the tenant hands over the money. I’ve tried to chase a claim only to discover that the call centre had moved to Slough (nowhere near us) and, despite being allowed to discuss it, the staff couldn’t give me any information “under Data Protection” and “You’ll have to ask the tenant yourself”. I want to scream down the phone “I bl***y well would if I thought I’d be getting a straight answer and was prepared to camp outside their room all night until they got home!”.
Why LHA Doesn’t Help Tenants
My tenants don’t mean to not hand over the LHA payment, but when their bank account is in the red, they have no mobile credit, possibly haven’t eaten for a while, eeking out their tobacco pouch so their roll up resembles more Rizla and saffron strands than a good smoke, I empathise with their temptation to hand over £150 rather than the £200 paid by the Council. In their heads (especially if they’ve recently been working), 50 quid is easy to reimburse within the next couple of weeks. Then the reality sets in that there’s no financial room to manoeuvre: skimming £20/£30/£40 off the LHA payment to cover the shortfall of Job Seekers Allowance means they end up £300-£400 in arrears before you know it and start to get stressed. At that point, they do what most of us do when we get stressed – drink more, smoke more, blow whatever cash is available because, let’s face it, it can’t get much worse. Their girlfriend/boyfriend, friends and parents are probably financially exhausted, they’re drowning in debt, despondent from hitting a job wall – so what if they fall out with their landlady on top? Life is so chaotic we’ll string her along with a few well honed excuses that used to work on our mothers and teachers.
Greg is £500 in arrears and I don’t want to see him homeless but this is what’s happened to him. When the process starts I meet with the tenant and explain that this is what will happen and, in order to avoid it, we have to work together. I’ll happily reduce the rent to reflect the LHA payment provided that the LHA is handed over as regular as clockwork. “Yeah, yeah, yeah, I promise. It won’t happen to me and I’ll be working again soon.” I’ve experienced this time and time again. The most common excuse is “Housing have messed up my claim AGAIN” – and I can’t check out its validity.
Back to Basics – The Real Reason for Housing Benefit
The market’s changed. For every ad I place the majority of calls will be from working professionals who have chosen an all-inclusive rate so they have enough salary left over to have a life. I no longer need to fill the rooms with the slightly odd, vaguely desperate or those that fall out of society’s moral code of conduct.
Back in the late 1940s the Social Security System was so named because:
SOCIAL def pertaining to human society
SECURITY def freedom from danger, risk, etc; safety
There are still at least 1 out of 10 callers wanting a room who won’t pass the referencing process, can’t get the deposit together or will struggle to conform to a landlord’s ideal tenant.
My business head tells me to go with this new professional market demand and fill the houses with law abiding, rent paying via standing order tenants who read and abide by the AST and wash their sheets weekly. My life will be calmer yet poorer through the lack of tenants educating me on the true meaning of survival and refusal to conform to society’s expectations.
Please, bring back direct payments to landlords so our business heads no longer discriminate against the unemployed.