Becoming a landlord

[Kim]

But the way the insurance company wanted more than three times the premium if I wanted to let my house to people "receiving benefits" I can only assume that, statistically speaking, people on benefits are more likely to trash the place than people not on benefits.

Does the insurance cover failure to pay rent?  That would make pragmatic sense, in as much as it reflects the risk of DWP incompetence/malice jeopardising their income.

[L CC]

How does the landlord know the tenant is in receipt of benefits?
I've never been asked, and until my current social housing I've received it ever since I left my husband and had to pay rent by means other than working for the landlord.

[barakta]

I would love to be able to challenge "no DSS" on Equalities grounds... But am not currently on the ones I know they mean so can't challenge it but would love to see it taken to a judge to see if it's indirect sex and disability discrimination...

[Kim]

I would love to be able to challenge "no DSS" on Equalities grounds... But am not currently on the ones I know they mean so can't challenge it but would love to see it taken to a judge to see if it's indirect sex and disability discrimination...

One lawsuit at a time, young padawan...

[Cudzoziemiec]

How does the landlord know the tenant is in receipt of benefits?
I've never been asked, and until my current social housing I've received it ever since I left my husband and had to pay rent by means other than working for the landlord.

By asking for a reference from your employer, or books if self-employed. I don't think they're really bothered about in-work benefits.

[geraldc]

Most agents use referencing agencies. You'll be expected to earn 3 times the rent to pass. If you don't earn enough, they'll ask for a guarantor.

If you don't earn enough and say that you're planning to apply for housing benefit or whatever, then most landlords will say no. Estate agents aren't supposed to say they won't take DSS, they can say they don't have any landlords who won't accept DSS.

If the tenant is on housing benefit, it's very hard for them to move. If you're looking to move, then you'd need 6 weeks security deposit, and months rent in advance. The council won't provide you with this, and if you have that much in savings I'm pretty sure they won't be giving you any benefit to begin with. Housing benefit payments are strange, they tend to pay weekly or some variation, whereas most ASTs are based on calendar months, so for a lot of the time, a DSS tenant would technically be in arrears. This voids a lot of landlord rental insurance.

If your landlord has served notice on you, then the council won't rehouse you until you can present them with an eviction notice. So there are lots of fun and games involving courts.

[Pancho]

How does the landlord know the tenant is in receipt of benefits?
I've never been asked, and until my current social housing I've received it ever since I left my husband and had to pay rent by means other than working for the landlord.

By asking for a reference from your employer, or books if self-employed. I don't think they're really bothered about in-work benefits.

It seems to be insurance that drives the "no benefits" policy - I wonder how the clause in the insurance policy is worded. If the policy refers to "benefits recipients" then that rules out about 70% of the population but without clarification from the insurers and a change to the clause, it'd be cavalier to rent to pensioners, parents, etc, etc. (if you're dependent on insurance)

[L CC]

If your landlord has served notice on you, then the council won't rehouse you until you can present them with an eviction notice. So there are lots of fun and games involving courts.

The council wont rehouse till you've jumped through all the hoops and got the maximum extension on your eviction notice. DAHIKT. Even then you have to go through the bidding process for properties (most councils now don't allocate housing from a shortlist but ask those on their waiting list to bid for available social housing) and you may not be the neediest applying for a property. They can house in you in bed & breakfast and still be fulfilling their statutory duty. Bed & breakfast accommodation which you have to pay for yourself, claiming benefit to help like any other housing.

I've earned 3x my rent as income, received housing benefit and moved house, saving half the deposit and borrowing the rest. Housing benefit is calculated weekly but paid monthly so does not leave you in arrears. My employers reference doesn't say how many children I have or how much benefit I can claim, only how long I've been working for them and my gross salary.

Haven't you heard? People on massive incomes are claiming massive amounts of benefits. I read it in the Daily Mail.

[Pancho]

You're both right.

For the council to house you, you need to *be evicted* not just receive a letter (actually, I think they've softened on this lately). So you have to hang in there through all the court hearings etc until you get slung out. Just for form and to keep the bureaucrats happy. Nice if you've got children (not).

OTOH, while the govt have thankfully and at last, reigned in handouts to people on big incomes, they haven't stopped handing out our wonga to people with assets. I know (more than one person) with humungous trust fund assets and million pound houses owned outright who still get given hundreds (actually it might be more even) in working tax credits and child tax credits.

[Polar Bear]

It's no surprise to me Pancho.   

It was recently reported that there are MP's who rent out houses that they own in their own constituencies pocketing the cash, then rent a place to live in, in their constituencies, claiming the rent on expenses.   More handouts to those 'with'. 

[geraldc]

I think if you're earning, and getting help with housing costs, it's different from when you're signing on, and completely reliant on the council to pay your rent. I've seen lots of instances where the housing benefit just gets stopped for a week for any number of reasons, and then the council claims that there are no arrears.

In London, if housing benefit is overpaid, they don't go after the tenant to ask for it back, but to the landlord.

[contango]

You're both right.

For the council to house you, you need to *be evicted* not just receive a letter (actually, I think they've softened on this lately). So you have to hang in there through all the court hearings etc until you get slung out. Just for form and to keep the bureaucrats happy. Nice if you've got children (not).

OTOH, while the govt have thankfully and at last, reigned in handouts to people on big incomes, they haven't stopped handing out our wonga to people with assets. I know (more than one person) with humungous trust fund assets and million pound houses owned outright who still get given hundreds (actually it might be more even) in working tax credits and child tax credits.

It must be a recent change. A couple I know basically had to wait to be evicted before the council would house them. It was just what they needed, having three children (one under 2) and with the wife about 8 months pregnant.

[contango]

But the way the insurance company wanted more than three times the premium if I wanted to let my house to people "receiving benefits" I can only assume that, statistically speaking, people on benefits are more likely to trash the place than people not on benefits.

Does the insurance cover failure to pay rent?  That would make pragmatic sense, in as much as it reflects the risk of DWP incompetence/malice jeopardising their income.

I forget whether it will cover the rent if the tenant doesn't (the lettings agent provides that cover once the tenant has passed credit and background checks), but it does include cover for accidental and malicious damage caused by the tenant as well as legal costs involved in getting them out.

I have to wonder to what extent the decent people who happen to be receiving benefits are tarred by association with the tenants who can only be described as scumbags, or whether there is some issue whereby people on benefits are just statistically more likely to be problematic as tenants. Certainly when I was talking to the people I know who are on benefits my insurance company said that if I could provide details of just what benefits they received and how long I had known them (and in what capacity) they expected the underwriters to lower the premium.

It sucks pretty badly if you're a member of an identifiable group but share few practical characteristics of that group - whether you're a would-be tenant on benefits or a young male driver who doesn't think with the bit between his legs - but sadly that seems to be the way the world is going.

[geraldc]

The referencing company and the insurance company that offers rental insurance are linked. If the company didn't carry out the referencing and pass the tenants then they won't offer you insurance. The insurance covers the rent (less the excess, which can be one months rent, but is negotiable) up until vacant possession of the property is returned to the landlord. So the insurance company will handle the eviction, and then will pursue the tenants for the cost of the eviction after they are out.

As with all insurance, they will try wriggle out if you fail to meet the criteria, eg notifying the insurance company too late, eg after 3 months arrears have built up, instead of 2 etc.

[rogerzilla]

It's no surprise to me Pancho.   

It was recently reported that there are MP's who rent out houses that they own in their own constituencies pocketing the cash, then rent a place to live in, in their constituencies, claiming the rent on expenses.   More handouts to those 'with'.

Receipt of child support and maintenance, which can be thousands per month (I heard of a guy paying £3,500 although presumably that was for the mortgage too) aren't taken into account, so get yourself a cushy job just over the minimum hours and you can get an extra £250 or so per month from the taxpayer.

[Pancho]

You can also salary-sacrifice into a pension and get your pay down enough to be made up by CTC and WTC. It's free wonga - pay no tax and get a bung from the daft govt muppets.

Or go self employed. No need to actually do any business - but it qualifies you for WTC, CTC, HB, etc, etc, etc. Beats working!