Welcome back to the Landlord Law Blog after the Christmas break.
The big landlord related story over the past few days is that of the Wilsons (who rent out some 1,000 properties in the Ashford area) sending out eviction notices to all their housing benefit tenants and stating that they are not going to take on any more.
I am not surprised.
I interviewed Fergus Wilson in 2003 and he told me then that they always have rent guarantee insurance for all their tenants.
From the newspaper articles I have seen it appears that their main reason for turning against HB tenants now is that rent guarantee insurance is no longer available for them. Hence the eviction notices.
The whole question of housing those on benefit is a tricky one. Although there are many, many excellent tenants on benefit, overall they tend to be more problematic:
- They have less income than most working tenants and so finding money to pay rent is inevitably going to be harder
- The housing benefit received is generally less than the market rent – so either the landlord has to accept a lower rent (and why should they do that?) or the tenant has to make up the difference – which will not be easy for them
- Rent is not paid direct to landlords by the benefit authorities in most cases
- Benefit Offices are not known for their efficiency and landlords often have long waits before payment is received
- Benefit tenants as a group contains more people wth some sort of personal problem – these are after all people who are unable to get or hold down a job
- It appears that rent guarantee insurance is not available
For an example of a well-meaning landlord renting to a single Mum on benefit, coming unstuck look no further than Kate’s Story on this blog.
Given that there are many working tenants looking for property to rent – why, all things considered, would any landlord choose to rent to tenants on benefit?
Sending eviction notices to existing HB tenants sounds rather harsh but it is understandable. Being a landlord is, after all, a business. It is not the job of private individuals to house the homeless
If a landlord is willing to rent without rent guarantee insurance, there are things that can be done.
It is arguable that this is a better option than having benefit paid direct to the landlord, as then the benefit office is unable to ‘clawback’ the benefit from the landlord if it later turns out that there has been an over payment.
Another option is to take a personal guarantee from a family member – making sure that this family member owns their own home and is in employment. Then, if there is ever any need to get a CCJ, there is some chance that it will be paid.
However, the government’s apparent belief that lower benefits will result in landlords reducing rents, does seem to be extraordinary.
The only way that would happen would be if there was an oversupply of rented property on the market, Whereas as we all know this is far from the case.
Another reason why the government needs to start building.
NB You can find out more about rent guarantee insurance here.