DSS or Dogs?

Yesterday a very intersting article was published on the BBC website: No DSS: Most flat shares refuse benefit claimants

It claims that landlords are twice as likely to accept potential tenants who own pets than people who claim benefits.

The article goes on to look at the case of one particular tenant, Eva, who is a single parent, working full time but having her low wage subsidised by Housing Benefit. Day in day out we come across numerous people like Eva, hard working, honest people who have become victims of a stereotype and face discrimination due to their circumstances. We do not recommend or condone lying about your circumstances to obtain a rental property, often with our tenants it is the case that we can sit down and work together to agree affordability and help find a suitable property, as we understand the local market and our landlords tend to be receptive to tenants in receipt of benefits.

The private rented sector has doubled in size since 2002 and now accounts for 20% of all UK households, recent cuts in welfare means benefit payments in many parts of Manchester no longer cover the rest.

You can see our thoughts below on this short video regarding renting to people on housing benefit

 

Every week our Lettings Manager, Joe, makes a short video in response to enquiries throughout the week, if you’re interested in viewing more of our videos you can do so on our YouTube Channel

Should You Let to DSS Tenants?

Some landlords won’t let to DSS tenants under any circumstances, but others recognise that not all DSS tenants are going to wreck the house and turn it into a crack pad. In fact, some DSS tenants have more regular, stable incomes than employed people and may be a better bet for a buy-to-let landlord. So how do you sort the wheat from the chaff?

Delays in Payments

One of the key factors with DSS tenants is that they are dependent on the efficiency of the benefits systems which pays them. Universal credit has acted as a gigantic spanner in the works here. Because it involves a switch from the previous benefits system to a new set of processes, it was always going to be difficult, but add in the necessity to alter computer systems, which has never been a strength of government, and you have a recipe for tenants who are not getting the money they need to pay their rent.

This is not their fault, and if they were employees who had not been paid because the banking system had gone down, there would be abject apologies on their behalf. However government appears to think that not paying claimants is a risk-free activity, and government has also decided that DSS tenants who live in private rented accommodation are now personally responsible for paying housing benefit to their landlord.

Clearly, if there are delays in processing a person’s claim, they will not get their housing benefit on time and will be in a position where they must pay the landlord late. DSS tenants are people who are in receipt of housing benefit. How much they get depends on their circumstances and any other income that they have.

But tenants are usually very clear with landlords about the amount of benefits they receive, because if they manage to secure a tenancy, they need to inform the Housing Officer of the new rent that they have agreed to.

Poor Publicity has Affected the Better Tenants

Many tenants who are claiming benefits and want to pay landlords rent from their housing benefit are in their current situation through no fault of their own. They may have been diagnosed with a serious illness that has meant they could not continue in work. Or they may have lost their jobs, been unable to keep up their mortgage payments, had to sell their house, spent the resulting equity in private accommodation and finally ended up claiming housing benefit. Anyone dealing with lettings and Manchester property in general will have come across these cases.

Unfortunately, some reality TV programmes have given the impression that anybody claiming any kind of benefit is a drug-addled waster who will trash the property and leave without paying six months’ rent. This simply isn’t the case, any more than employed people who appear to have a lot of income are really faking it and waiting to sublet the property to another dozen tenants.

In the employed sector and the DSS sector, there are good and bad people who may make excellent or dreadful tenants. The key thing is to be able to distinguish between the two.

How to Get a Good DSS Tenant

One of the things you need to look for is any disparity between the amount that the tenant is receiving in housing benefit, and the amount that you are charging. The tenant has to make up the shortfall every month and if they are disabled or have no access to extra income, they are going to find this extremely difficult. So, to avoid rent arrears, make sure that your tenants can afford the rent from their housing benefit.

Make sure that you have a suitable landlord’s insurance policy in place and don’t gloss over the fact that you are letting to DSS tenants. Yes, they are slightly higher risk and you may need to pay a slightly higher premium but let’s face it, these tenants tend to be renting in areas where property is cheaper, and therefore rental yields are higher. Just accept slightly higher insurance as the cost of doing business.

And always meet the tenants personally. Your gut feeling is probably a better guide than any risk assessment. Look at why the tenants are dependent on DSS payments and you’ll get some insight into whether they are seeking a secure home or are irresponsible and likely to cause you problems.

Don’t Fall Foul of New Letting Regulations

The government recently revealed they are planning to crack down on rogue landlords and agents, with those who treat tenants poorly potentially being banned from letting properties. The new initiatives will target property agents and landlords who mistreat their tenants and do not provide them with safe and suitable accommodation. The plan is to improve standards across the rental market as a whole and to protect both tenants and the interests of responsible property owners who ensure their properties meet the required standard. Gavin Barwell, the government’s current housing minister, set out the proposals, which aim to ensure the worst offenders can be banned indefinitely from managing or letting a property. In the event of banning orders being issued, the landlord or property agent would have their name added to a national register to enable the authorities to see they don’t let or manage any other properties anywhere in the country in future. It is hoped that the proposals will help protect the millions of tenants currently renting properties in the UK.

Some of the most serious offences the proposals aim to address include the flaunting of health and safety regulations. In the event a landlord fails to complete work requested by the local council, a ban could potentially be issued. Other serious offences include things like making violent threats to tenants, or evicting tenants illegally.

It is hoped the proposals will force rogue landlords to ensure properties remain in a good state of repair at all times, and that the rights of private tenants are not neglected. Rogue landlords are commonly featured in the media, and the charity Shelter has an ongoing campaign that urges local authorities to sign up and pledge to stamp out irresponsible landlords. Over 100 local councils are currently taking part in the campaign.

Advice for Landlords or Would-be Landlords

If you are currently a landlord or are thinking about entering the property market as a landlord, you will have nothing to worry about if you adhere to all the necessary rules and regulations. In fact, for legitimate and responsible landlords and property agents, the new proposals should be seen as a positive thing. With rogue landlords and agents being forced out of the market, tenants will be safer and the remaining landlords will enjoy an enhanced reputation rather than being tarred with the same brush as the less scrupulous individuals who blight the property industry. If you’re looking for Harpurhey landlord advice, or own property in any other district of Manchester or the surrounding areas, dealing with a reputable property agency and ensuring you comply with all relevant regulations will be vital in order to ensure you are not faced with a lengthy ban.

Some of the reasons a landlord or agent could be banned include:

– Evicting a tenant illegally
– Letting out unsafe properties that have failed inspections by the local council
– Committing or conspiring to commit a criminal offence with the tenant, including supplying illegal drugs or tax evasion
– Criminal damage or theft
– Growing cannabis on the property
– Committing housing benefit of identity fraud
– Violently threatening a tenant, or actually using violence against them
– Letting a property to anyone who is in the country illegally
– Failing to complete any work the local council requires in order for the building to comply with health and safety regulations

The minimum ban length will be 12 months, while there is no upper limit for the maximum time a rogue landlord or agent can be banned for. This will allow the authorities to ban the worst offenders indefinitely, and potentially for life. Anyone served with a banning order will be unable to profit from renting out any other properties he or she owns or manages. Those banned will also be unable to work in the property management sector subject to banning orders will not be able to earn income from renting out housing or engaging in letting agency or property management work. Unscrupulous landlords might also have their properties taken over by local authorities, who would then manage the properties themselves and rent them out to tenants.

The proposals are good news for responsible landlords and property agents who uphold high standards and provide suitable accommodation for tenants. By improving the standards and practices across the industry, the new proposals will ensure reputable landlords do not lose tenants to those who charge cheaper rents by bypassing applicable rules and regulations and failing to properly maintain their properties.

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