Homelessness In Milton Keynes - A Project

[Neverwhere]

Things being in a state of disrepair in my experience tends to be the norm in the PRS and it can be difficult to get landlords to do anything, as that's their nature, their standards vary.

A council cannot leave a boiler 'obsolete' for any prolonged length of time without very good reason. Please read about the 'Right to Repair' which exists in the social rented sector, legislation among many which barely exist in the PRS and what does isn't even properly enforced anyway. Can you imagine the uproar among landlords and the increased costs for them, were these same strict standards to apply to the PRS?

An excellent point spacedin, thank you for making it.

[goldbug9999]

As there is no possible way for me to ever be convinced that a council can provide anything more cost effectively than it could be provided by a for profit organisation

The public sector has one unassailable advantage when it comes to providing housing - it can use cheap land and grant it planning permission.

[Neverwhere]

Another one maxing out on Housing Benefit and exploitatively taking more over and above out of her tenants' Disability benefits:

Edna 06/11/2015 at 16:35

I have 9 properties in the south east and south west of England. If I were to charge the average market rent I would be receiving around £10,750 per month. I actually receive £8,145 per month.

In four of my properties my tenants are disabled and living on benefits. They are not in a position where they can work and they are reliant on HB to pay their rent. If I increase the rent they will not be able to afford it as they are already topping up LHA. Other tenants are on low wages (and they don’t spend money cigs drink etc.) and can barely afford the rent now. If I evict them, they will not be able to find anywhere else within commuting distance of their work at as low a rent.

Most of my rents have not increased at all or at least only by very small amounts over the last five years. I have always managed to keep up with any repairs and provided comfortable and safe homes. I feel very sad to be so vilified.

Sadly I will now have to increase rents and sell some properties – otherwise I could lose my own home.

[Venger]

Things being in a state of disrepair in my experience tends to be the norm in the PRS and it can be difficult to get landlords to do anything, as that's their nature, their standards vary.

A council cannot leave a boiler 'obsolete' for any prolonged length of time without very good reason. Please read about the 'Right to Repair' which exists in the social rented sector, legislation among many which barely exist in the PRS and what does isn't even properly enforced anyway. Can you imagine the uproar among landlords and the increased costs for them, were these same strict standards to apply to the PRS?

Exactly.

This PRS landlord's view on it

Latest: My Landlord Annual ‘Gas Safety Check’ Failed Good & Proper

12 Oct 2015 / Decorating & Maintaining BTLs /

The guidelines don’t specify exactly how quickly landlords need to react to safety failures- it’s assumed that each case is judged on its own circumstances. However, if there’s one thing that landlords should act quickly on, it’s gas/heating issues, especially if they pose potential risks. Common sense if you ask me. Of course, appliances break, including vital ones that provide heat and water, that’s normal. However, if you’re found guilty of being neglectful or bone-idle like a lemon when the time calls to fixing those appliances, you could face heavy penalties, especially with charities like Shelter aggressively campaigning against rogue landlords, and making it so damn compelling and easy for tenants to prosecute. Hell, they make me want to sue myself!

That said, if you’re a tenant under the belief that your lousy landlord is neglecting his/her duty to repair and maintain, you should report your landlord.

Runs his own blog (some of it is okay to be honest - at least it shows some of the downsides to the BTL miracle easy riches) - but he's no friend to renter-saver HPCers.

Mark Alexander ‏@iAmALandlord Jul 30

If you don’t want the value of your house to plummet in a few years time please read this http://www.property118.com/?p=76936 #homeowners

The Landlord Jul 30

Every UK landlord should sign this petition to reserve the planned tax relief restriction: https://petition.parliament.uk/petitions/104880…

The Landlord Jul 8

I'm going to pass all my extra tax costs onto my tenants! #budget2015

[Neverwhere]

More gouging from the not-really-private anti-free market sector:

Robert Mellors 06/11/2015 at 18:40

Reply to the comment left by “David Oswald” at “06/11/2015 – 17:12“:

It is not always quite as straightforward as this. The maximum LHA is not necessarily the maximum Housing Benefit that the landlord could achieve from the property. This is because there are exceptions to most rules. Having a good knowledge of the situations that create those exceptions can enable landlords to maximise their rental income and minimise their potential risks/losses.
A very simple example of how knowing the exceptions can be useful is knowing how to get the Housing Benefit paid direct to the landlord from the start of the tenancy. Landlords who are unfamiliar with the Housing Benefit regulations often do not do this, or even struggle to get this in place even when the tenant has over 2 months rent arrears.
The new landlord may also wish to consider methods of reducing his risks, with the most obvious method being a rent guarantor (but there are other methods as well).
They may wish to consider ways to maximise the other possible income streams from the property, if appropriate for the property.
They may wish to consider different letting strategies (e.g. different household compositions), that could increase their rent, lower their risk, or lower their management hassle.
They may also benefit from knowing about other income sources for the tenant to enable them to pay their rent (or rent arrears), e.g. Discretionary Housing Payments (DHPs), local assistance schemes, deductions from other benefits, etc.
A Housing Benefit consultant is unlikely to be of much assistance, and going to a Council website is also unlikely to be of much use except for obtaining the basic LHA figure.

David Oswald 06/11/2015 at 19:22

You’ve got me very interested Robert. I let to HB tenants and I’m familiar with all the points you make except your statement in the first paragraph. Or are you referring to DHP top ups if the max LHA won’t secure or retain a tenancy.?

Could you please expand on how to get more than the usual maximum LHA?

[Neverwhere]

Further detail on how to maximise costs to the taxpayer as a not-really-private sector landlord:

Robert Mellors 06/11/2015 at 22:01

Reply to the comment left by “David Oswald” at “06/11/2015 – 19:22“:

One example would be overcoming the single room rent restriction (now called the LHA shared room rate). This is where HB is reduced for single people under 35, to the shared room rate, even if they are renting a self-contained flat/house. Someone 35 or over may get say £100 pw Housing Benefit, but a tenant under 35 may only get £60 pw (i.e. what the local authority considers to be the LHA rate for a room in a shared house). A landlord that does not know about the exceptions would therefore not offer a self-contained property to a single person under 35. However, if you ask the right questions when the potential tenants apply for the tenancy, you may find that the applicant falls within one of the various exceptions. The exceptions include people who are in receipt of certain disability benefits, but can also include people age under 22 who have been in local authority care, or those age 25 – 35 who have spent 3 months or more (at any time, ever) in a homelessness hostel, drug/alcohol rehab, or a domestic violence refuge. Of course most applicants would not declare this, and most landlords would not ask such questions, so many landlords are missing out on these potential tenants or are letting to them at a rent level below what they could achieve. This is one example (for self-contained tenancies). For HMO landlords, there are even more ways of maximising the Housing Benefit income.

[SarahBell]

1/3 of housing in disrepair is council.

What I know of social housing it would take a huge cut in the number of senior managers before the books ever came close to balancing.

[Neverwhere]

Link to any evidence at all for that?

[Neverwhere]

More not-really-private anti-free market landlords maximising costs for the taxpayer, minimising quality for their tenants and using state subsidy to prevent the operation of a free market in private rents and set as high a floor under them as possible:

Jonathan Clarke 06/11/2015 at 23:44

One of thee best ways to max out on LHA I find is to put a 3 bed entitlement family into a 2 bed property, a 2 bed family into a 1 bed etc . Such is the demand for accommodation that many of my applicants are quite happy to do this if it moves them to the top of the waiting list.

I always get paid direct since the housing amendment regs changed in 2011 and I will often get a months rent and a deposit funded by the council up front. They even paid up on one property I bought for a client before we had even exchanged contracts. .

Robert Mellors 07/11/2015 at 11:19

Reply to the comment left by “Puzzler ” at “07/11/2015 – 09:29“:

There is no issue of fraud in Jonathan’s strategy, in the examples given, the maximum LHA entitlement would be based on the household size, so this would be the same whether the family live in a house that is of the size they are entitled to, or whether they CHOOSE to live in a smaller house. It is their choice.
But, what it does do, is it gives them the opportunity to get a smaller house that has a higher market rent (perhaps a nicer location, or better condition, or different type (e.g. a bungalow)), providing the property is within the LHA rate they are entitled to. Tenants who use such a strategy when house hunting will find a wider range of properties available to them, and this could be vital to their needs.
An example may be:
a family entitled to the 3 bed rate of LHA may need to move closer to an elderly relative to provide care and support, but there are no 3 bed houses available in that area that are affordable (or available to LHA tenants), but there is Jonathan’s 2 bed house available at the market rent in that area, and the 2 bed market rent of that property is the same as the 3 bed LHA rate, then the family could CHOOSE to move to Jonathan’s lovely 2 bed house in the ideal location, and at a rent that is within their 3 bed rate LHA entitlement.

In such a scenario there is no fraud, and absolutely no detriment to the Housing Benefit coffers (the family would still only get the amount of LHA they were lawfully entitled to), but the tenant family would have a wider freedom of choice, and the landlord would be able to let his property at the market rent to a family on benefits (who would otherwise be excluded from that area due to higher property values). In the example I have given, it would also save the taxpayers (via the Council) lots of money in care fees for the elderly relative who could now be supported by family members living nearby. Tenants win; landlord wins; elderly relative wins; council wins; taxpayers win. What better result could there be for everyone?

Why would creating a win/win/win/win/win situation give landlords a bad name?

[Neverwhere]

More gouging of the taxpayer, provision of inappropriately sized accommodation, and inflating of local rents that will over time push up rents for private renters and thus increasing the LHA calculated against those rents; allowing for greater gouging of the taxpayer from increased Housing Benefit entitlements that - despite what the not-really-private sector landlords say - are gradually pushed up over time by this anti-competitive, anti-free market, anti-capitalist activity (emphasis added):

Peter Johnson 07/11/2015 at 16:40

Reply to the comment left by “Robert Mellors” at “07/11/2015 – 16:07“:

Let me run an example by you please –

Family of 6 kids, husband and wife, wife stay at home mother, 250 per week child tax credit, 50 per week child benefit, husband works 35 hours and gets paid 13K. This family qualify for £1650 of the maximum £1684 of LHA 4 bed rate for my area so the fact that my house is a 3 bed can I still get HB to pay me the £1650 of their maximum entitlement of HB even though the ‘market rent’ for a 3 bed in my area is £1500?

Thanks

Robert Mellors 07/11/2015 at 17:08

Reply to the comment left by “Peter Johnson” at “07/11/2015 – 16:40“:

The Housing Benefit is based on the LHA rate entitlement for that household, less whatever deductions due to income or previous overpayments (HB clawback), so presumably you have already determined the deductions as you say they would be entitled to £1650 of the maximum £1684 pcm. The market rent for 3 bed properties in your area does not come into the HB calculation in this case as the family are entitled to the 4 bedroom rate of LHA. So yes, I believe you would receive £1650 pcm Housing Benefit if that is the rent you charge them.

Housing Benefit tenants do usually come with higher risks, so if you do go down that route then may I suggest that you look at using the additional income to pay for rent guarantee and malicious damage insurance, and anything left over put back into the property maintenance so as to make it a place that the tenants will respect and look after and never want to leave. That will be good for your tenants, good for your property, and good for your business (less voids, damage, re-letting fees, etc), and of course still be of no detriment to the Council or taxpayers (as the family would be entitled to this amount of HB anyway).

Peter Johnson 07/11/2015 at 18:52

Reply to the comment left by “Robert Mellors” at “07/11/2015 – 17:08“:

I really appreciate your first class advice, thanks you!

Do you find as I have discovered that the HB departments have a reluctance to pay the 4 bed rate once you tell them that your property is a 3 bed sized property? I am having this problem, last week I had numerous problems with a person in HB that kept saying to me that the market rent is not 1684 for a 3 bed property in my area and is more near 1500 so why am I charging 1684 as the 4 bed rate? I gave them the reason why and they claimed they had never herd of anything like this and that I should charge the 3 bed LHA rate as the property is 3 bed. I realise that they are wrong but is there something I could quote them in the HB regulations that would make them accept what I am saying and convince them?

Just so others members dont think I am just simply abusing the system, the 3 bed I offer is simply immaculate with nothing lacking, completely refurbed but for that I search out a 4 bed LHA family

Robert Mellors 07/11/2015 at 23:00

Reply to the comment left by “Peter Johnson” at “07/11/2015 – 18:52“:

Hi Peter

You don’t need to set your rent at the “market rent”. You are entitled to set your rent at whatever rate you choose. If you want to charge £50,000 pcm for your house you can do so, you may get no tenants, but you are perfectly entitled to charge what you want. Regardless of what rent you set, the tenants will still only receive the amount of Housing Benefit that they are entitled to, no more, no less, so what your contractual rent is makes no difference to the Housing Benefit they receive (unless your rent is lower than their maximum entitlement). You do not need to justify your rent level to anyone, just charge it and let the HB office work out the tenant’s HB entitlement based on it.

“When the donkeys call you a fool, it is a very rare compliment.” – Don’t try to justify your business decisions to donkeys, they are not capable of understanding.

[Neverwhere]

Essentially admitting that he is not renting out property he is farming people, hence why he wants to be paid per head of cattle, and pack them in as tight as possible:

Peter Johnson 08/11/2015 at 12:41

Reply to the comment left by “Robert Mellors” at “07/11/2015 – 23:00“:

Hi Robert,

But is there something I could quote them in the HB regulations that would make them accept what I am saying and convince them that I can charge whatever rent I like and that the amount of rent is set by the family entitlement/make up as opposed to the actual number of bedrooms in the property and market rent? How can I put them straight without causing them to get their backs up?

Many thanks

The property is not the commodity to him. The tenants are.

Clearly the state-subsidised, anti-free market, not-really-private rental sector is the real gravy train on biscuit wheels.

Edited November 8, 2015 by Neverwhere

[Neverwhere]

Robert Mellors 08/11/2015 at 20:34

Reply to the comment left by “Peter Johnson” at “08/11/2015 – 12:41“:

The HB regulations deal with LHA/HB entitlements, it does not determine what rent you decide to charge for your property. If a landlord of a 10 bedroom mansion decides to let the property for £10,000 pcm to a family that would be entitled to the 3 bed rate of HB (say, £1200 pcm), then that is the landlord’s choice. The landlord would expect there to be rent arrears, but it is his choice, the HB Dept cannot say that he cannot do this. Likewise, if I choose to let a 1 bedroom flat at twice the normal LHA rate, to a tenant that would only get the LHA rate, then again that is my choice (and I would expect the tenant to fall into arrears and be unable to pay, but nevertheless I am free to let the property at that rate and suffer the consequences).

You do not need to justify the rent you charge, and indeed it is best if you do not try to do so. Whatever family you let the property to, and whatever their circumstances, and whatever the rent is, it makes no difference to the HB calculation, the family will only ever receive the HB level that they are entitled to.

The only exception to this is if you collude with the family to somehow force up the rent so as to take advantage of the HB system, (this could perhaps be a “contrived tenancy”), but simply charging a rent that is higher than the LHA rate for that size house definitely does not bring you into that category.

What you need to remember is that the LHA rate is NOT the “market rent” for a property, The LHA rate is set at the 30th centile of the market rent for that size property as determined at a particular date which could have been many months ago (up to 12 months ago). This means that if the LHA rate for a 3 bed property is £1500, then 70% of 3 bed properties in the area are being let at more that £1500 pcm.

As the LHA rate is only the 30th centile, this means that only 3 out of every 10 properties of that size and in that area are being let at a rent that would be affordable to a household entitled to the 3 bedroom rate of LHA. (It does not even mean that many are actually available to LHA tenants). This could mean that the average market rent for a 3 bed property may be £1800 (for example), in which case, letting your property at £1650 pcm, you would still be offering your property at considerably below the average market rent, AND doing the social good of making it available to DSS/LHA tenants who may otherwise be excluded from obtaining a property of that quality.

– In this situation you are offering a high quality property at a rent level that is affordable to the family that wish to rent it. It is costing the HB (taxpayer) no more than if they rented a bigger property or a similar quality property in that area. – Sure, they could perhaps choose a grotty horrible 3 or 4 bed property and pay a lower rent, or move to a cheaper area, but this would be depriving the family of choice. (and they always have this option (i.e. moving elsewhere) at any point in the future).

You also need to bear in mind, that letting to DSS tenants is higher risk than letting to a well paid professional family, as it is virtually impossible to recover debts from DSS households, so the potential cost to your business is higher. This is why I suggested the extra allowance for insurance and maintenance, to mitigate these potential risks.

How the hell is this not forcing up the rent in order to take advantage of the Housing Benefit system?

Peter Johnson 07/11/2015 at 16:40

Reply to the comment left by “Robert Mellors” at “07/11/2015 – 16:07“:

Let me run an example by you please –

Family of 6 kids, husband and wife, wife stay at home mother, 250 per week child tax credit, 50 per week child benefit, husband works 35 hours and gets paid 13K. This family qualify for £1650 of the maximum £1684 of LHA 4 bed rate for my area so the fact that my house is a 3 bed can I still get HB to pay me the £1650 of their maximum entitlement of HB even though the ‘market rent’ for a 3 bed in my area is £1500?

Thanks

Edit: Also obviously the landlord in question couldn't charge more that rate on the open market as otherwise why would they be faffing around online trying to maximise how much welfare they can extract from the taxpayer? There is every indication that when they say 'market rent' they mean 'market rent' and not LHA 3 bed allowance.

Edited November 8, 2015 by Neverwhere

[Neverwhere]

How the hell is this not forcing up the rent in order to take advantage of the Housing Benefit system?

Edit: Also obviously the landlord in question couldn't charge more that rate on the open market as otherwise why would they be faffing around online trying to maximise how much welfare they can extract from the taxpayer? There is every indication that when they say 'market rent' they mean 'market rent' and not LHA 3 bed allowance.

Confirmation that what we are talking about is maximising costs for the taxpayer and charging Housing Benefit tenants higher rents than could be achieved in the actual private sector:

Peter Johnson 09/11/2015 at 12:23

Reply to the comment left by “Puzzler ” at “08/11/2015 – 13:23“:

Thanks Puzzler for your input but I respectfully disagree. In my case, if I am going to accept “market rent” for a highly demanded, fully refurbished 3 bedroom property, where I have excellent transport links, shops and services then frankly, given the red tape, financial risks (i.e. HB clawbacks etc) and bureaucracy involved in renting to housing benefit tenants I’d much sooner rent my property to a RELATIVELY hassle free private tenant. So the tax payer looses out because that HB family continue on in emergency housing at a rate much higher than the rate i’m proposing. In order to attract a 4 bedroom qualified tenant to accept my 3 bedroom property I ‘up my game’ and offer them a long term, good quality, family home. Surely this is better value for the tax payer than the short term, insecure, often sub standard (occasionally unsafe) temporary accommodation that the tax payer picks up the bill for anyway ? In my part of London I can’t imagine anyone who has a property THAT IS A DECENT STANDARD renting to HB for the same rate as they’d rent privately – we suffer very little voids and can attract good referenced tenants so on the basis of risk and reward economics I feel that a higher rate for HB tenants is justified while still maintaining win, win, win, win for all concerned !