Is this really a new subject? Of course not! The Government appears to be hell bent on listening and kowtowing to tenant groups who, it appears, are desperate to ruin the private rented sector.
This is now the next subject in a long list of issues raised by pro-tenant groups.
Sadly I very much doubt whether those representing landlords or agents – and who get involved in the consultation regarding benefit tenants – will really be listened to. This issue has been around for years and years. Both landlords and agents have raised the issues surrounding benefit so many times. We weren’t listened to!
Historically tenants who were in receipt of benefit were seen to be and were often treated as second class citizens. This view is, generally, long gone. Benefit is there as a ‘short term aid’ for people in need. This could be for a number of reasons such as divorce, redundancy etc. It is not there as a permanent solution and nobody has the right to believe that the state owes them a living.
Surely landlords have a right to have their rent paid in full and on time. A simple request you might say. The list of reasons why many landlords or agents do not accept tenants in receipt of benefit is long:
- Setting up a new benefit claim takes time
- Many tenants do not have access to the first month’s rent and deposit
- Many landlords and agents ask for a guarantor in case of problems
- Some insurers do not give cover where there are benefit tenants
- Some lenders will not allow benefit tenants
- Some landlords and agents are afraid of ‘clawback’
- Benefit is never paid in line with the tenancy agreement i.e. monthly in advance
Agents have a contract with their clients, the landlords. In that contract the agent agrees to look for the best applicant to rent the landlord’s property. This involves checking their suitability and their ability to pay the rent. Were the agent to simply allow an applicant to rent property without those checks and the tenancy goes wrong the agent would be help responsible and liable. The agent, therefore, has an obligation to the landlord. This situation will not change until the benefit system changes and insurers and lenders change their stance.
Investors aren’t averse to giving a home to a family on benefits; a good, long-term tenant is a landlord’s dream.
Clawback should not happen. Local authorities are only permitted to claw back benefit from landlords or agents where they can prove that the landlord or agent knew that the benefit should not have been paid.
A better way?
How much simpler would it be if all housing benefit was paid directly to the landlord, say at the beginning of the month. It would be the responsibility of the tenant to ensure that their claim was genuine and correct and if not then claw back would be on the tenant, not the landlord – perhaps from their other benefits.
Landlords are not averse to giving a home to a family in receipt of benefit; indeed a good, longterm tenant is what all investors dream of. Therefore a system needs to be introduced whereby the initial rent and deposit is paid, perhaps as a loan to the tenant in the first instance, so that the tenant can enter into an agreement with the landlord. Thereafter rent is paid to the landlord or agent.
Perhaps local authorities could introduce better deposit guarantee products since it can be difficult sometimes for tenants to find a suitable guarantor.
Then, of course, and most importantly we need to introduce Housing Courts which will act swiftly and properly when benefit is abused or stopped and the tenant gets into debt or is in breach of the agreement in any way.
Landlords are facing the threat of the removal of Section 21. Add to this the discussions surrounding DSS and many landlords will run a mile. This will be a disaster for the industry and for those tenants in desperate need of housing. If the PRS declines where will they find homes.
This one-sided action by the Government simply must stop. Yes, political parties want and need votes but this is not the way to get them! It is extremely sad for those of us who have worked in and for the lettings industry over many years to see it being damaged in such a way.
Frances Burkinshaw is an experienced independent trainer available nationally for in-house or group training. 01892 783961 or 07887 714341 or [email protected]