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Landlords 'may Turn Away People On Benefits When Universal Credit Comes In

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http://www.theguardian.com/society/2014/jan/10/landlords-benefits-universal-credit-tenants

Buy-to-let landlords may start turning away people on housing benefit, amid confusion over whether the benefit will be paid to tenants rather than directly to landlords as the new universal credit system is implemented.

Kevin Green, one of the country's biggest private landlords, who rents out more than 700 houses, predominantly in Wales, described the universal credit benefit system as "a time bomb" for the private rented sector.

He said that while he hoped to stick with benefit tenants he believed he was in a small minority: "Most other landlords are changing now. At least 90% of landlords are considering it. I know a lot of landlords all across the UK and most are saying they're not going to support housing benefit. It's a major problem for government."

Private landlords currently accommodate just over 1 million people who have part or all of their rent paid by the state. "My worry is for the customers. People are going to be homeless as a result of it. There's absolutely no doubt about it," Green added.

And minimum wage workers without families?

Sounds like the piggies are starting to squeal, some landlords may god forbid have to take what they can get in rent. Dreadful I'm sure in the money making seminars which guaranteed the income this wasn't discussed.

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http://www.theguardi...-credit-tenants

And minimum wage workers without families?

Sounds like the piggies are starting to squeal, some landlords may god forbid have to take what they can get in rent. Dreadful I'm sure in the money making seminars which guaranteed the income this wasn't discussed.

They can't all do it without there being a HUGE amount of voids...

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Even housing associations are worried:

The DWP has also accepted that there are some working-age people who will not be capable of managing a monthly payment, and for whom direct payments to the landlord will remain appropriate. There will be a mechanism within UC to facilitate the payment of benefit direct to the landlord once someone is identified as vulnerable. However, ministers have not yet announced what types of tenants will fall into this ‘vulnerable’ category. The National Housing Federation is calling on the Government to ensure that the category of ‘vulnerable’ claimants, to be awarded exceptions under Universal Credit, is drawn broadly, and includes residents with problematic credit and debt problems as well as those with health problems or a disability that make money management difficult.

http://www.housing.org.uk/policy/welfare-reform/universal-credit/direct-payments-to-tenants

On the flip side, another problem for landlords is that HB paid directly to them can be clawed back if the tenant was claiming illegitimately. I guess that risk is outweighed by the risk of the tenant pocketing the money and waiting for an eviction order.

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Worth musing on the fact that Green & the Wilsons own approx 1 in every 20,000 homes in the UK between them.

http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/10564154/Buy-to-let-gurus-Benefits-tenants-owe-us-800000.html

Buy-to-let gurus: 'Benefits tenants owe us £800,000'

Wilson's owed £800k it seems.

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How does a landlord find out you're on HB in the first place?

On a previous thread it was stated that unless you're 8 weeks in arrears your landlord won't know you're on HB.

But, even if you are 8 weeks in arrears, how does the landlord find out? Can he write speculatively to the council to ask?

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It seems the rules under UC for payments of HB to landlords in the event of arrears are the same or better for private landlords than the current rules.

So, is this really about other things, like the changes to the LHA formula?

Edited by oldsport

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Even housing associations are worried:

http://www.housing.org.uk/policy/welfare-reform/universal-credit/direct-payments-to-tenants

On the flip side, another problem for landlords is that HB paid directly to them can be clawed back if the tenant was claiming illegitimately. I guess that risk is outweighed by the risk of the tenant pocketing the money and waiting for an eviction order.

It's different for social landlords as they currently receive HB directly for all their tenants. Under UC they are being moved to a system more like that currently in place for private landlords.

Edited by oldsport

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It's probably just a lot of confusion. This is from the Indy:

http://www.independent.co.uk/news/uk/home-news/fergus-wilson-the-landlord-who-wants-to-put-200-families-out-on-the-street-9052651.html

Mr Coffey believes the Wilsons’ decision could be a result of changes to Government policy. He said: “It looks like this is a response to Universal Credit coming in over the next few years and there are a lot of fears about rent arrears building. The pilots have shown that arrears do build and landlords are not reassured that the government has protection in place.”

As far as I'm aware those pilots were with social tenants who aren't used to having the HB payments made to them. Private tenants already have HB paid directly to them so there should be no change for private landlords under UC.

Edited by oldsport

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Kevin Green, one of the country's biggest private landlords, who rents out more than 700 houses, predominantly in Wales, described the universal credit benefit system as "a time bomb" for the private rented sector.

Kevin Green, the 'wealth-coach'. :lol:

Coach it good champ.

http://www.housepricecrash.co.uk/forum/index.php?showtopic=194561&st=0

Benjamin Matthews, a letting agent in south-east London, said he was called this week by a client in Singapore: "He has quite a portfolio and the majority are rented out to people who are on benefits. He wanted to know: 'Has something happened? Has there been a big change?'"

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Even housing associations are worried:

http://www.housing.o...ents-to-tenants

On the flip side, another problem for landlords is that HB paid directly to them can be clawed back if the tenant was claiming illegitimately. I guess that risk is outweighed by the risk of the tenant pocketing the money and waiting for an eviction order.

I know a LL who has a tennant who owes him £1800 in unpaid rent. The tennant is in his 20s and is determined not to work. He's got no intention of paying (I assume he's pocketed/spent the HB) and has invited the LL to evict him so that he will get a council flat. He seems to be playing the system well, and doesn't care if he gets a CCJ.

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I know a LL who has a tennant who owes him £1800 in unpaid rent. The tennant is in his 20s and is determined not to work. He's got no intention of paying (I assume he's pocketed/spent the HB) and has invited the LL to evict him so that he will get a council flat. He seems to be playing the system well, and doesn't care if he gets a CCJ.

He won't get a council flat if he's spent HB money rather than pay rent.

It counts as making yourself deliberately homeless.

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The landlords want their money up front, before food, heat or any other necessary living cost is paid for......what do the payday loan companies do? take the money one second after it has been paid into bank account, could they try for second two? :unsure:

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It'll mostly be big families affected.

The new benefit caps 30k I think.

If they pay you all that and then you're expected to pay the rent from it too then anyone suddenly getting less money than they used to will perhaps feel sniffy about paying large chunks in rent.

If they opt for cheaper accomodation then the cap doesn't alter so they get more money tp spend on their own.

If Fergus's rents are 850 a month then £10200 if your £30k goes on rent.

If you find cheaper rent say £600 then £7200 goes on rent leaving you more to spend yourself.

If you're in social housing then rent might be £4680 so even more for you.

But with capping number of bedrooms you can have at 4 means you can't have a huge house unless you make the decision to spend your money that way.

It does sound fair to me.

In the same way as if you work you have to decide how much you want to spend on rent and find somewhere in that bracket...

Build another few hundred thousand social housing homes at sensible rents and you'll sort out the greedy landlords anyway. Without building more housing for social tenants though you can't alter things very much.

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There's an interesting new article in the Telegraph today looking at various reasons landlords may be shying away from HB. Even though it gives the best returns!

http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/10563064/Why-buy-to-let-landlords-are-shunning-profitable-benefit-tenants.html

Britain’s army of 1.4million private landlords are upbeat about 2014, expecting further price rises and rent increases. But in what is a growing political controversy – and a logistical nightmare for local authorities needing to house residents – private landlords are increasingly refusing to let property to tenants on benefits. Mortgage lenders and insurers are also growing wary.

According to the latest data on landlord returns letting property to those on benefits delivers excellent returns. Approximately 100,000 landlords deliberately target this market. And at 6.6pc the average yield for this type of let, calculated as rental income against the price of the property, is higher than for any other tenant group except migrant workers. By contrast, the lowest yields arise in the letting of smarter properties to executives.

.....................................

Edited by oldsport

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There's an interesting new article in the Telegraph today looking at various reasons landlords may be shying away from HB. Even though it gives the best returns!

http://www.telegraph...it-tenants.html

I suppose the higher yield with migrant worker tenants is because they're stuffed in like sardines. Seems the Wilsons are calculating on that basis.

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It'll mostly be big families affected.

The new benefit caps 30k I think.

If they pay you all that and then you're expected to pay the rent from it too then anyone suddenly getting less money than they used to will perhaps feel sniffy about paying large chunks in rent.

If they opt for cheaper accomodation then the cap doesn't alter so they get more money tp spend on their own.

If Fergus's rents are 850 a month then £10200 if your £30k goes on rent.

If you find cheaper rent say £600 then £7200 goes on rent leaving you more to spend yourself.

If you're in social housing then rent might be £4680 so even more for you.

But with capping number of bedrooms you can have at 4 means you can't have a huge house unless you make the decision to spend your money that way.

It does sound fair to me.

In the same way as if you work you have to decide how much you want to spend on rent and find somewhere in that bracket...

Build another few hundred thousand social housing homes at sensible rents and you'll sort out the greedy landlords anyway. Without building more housing for social tenants though you can't alter things very much.

IIRC it`s £26k

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He won't get a council flat if he's spent HB money rather than pay rent.

It counts as making yourself deliberately homeless.

No, he will be put up in a nice little bed and breakfast. Fed, watered, and a roof over his head.

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No, he will be put up in a nice little bed and breakfast. Fed, watered, and a roof over his head.

If he's healthy, without kids, the council won't have to provide any accommodation at all.

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