The direct payment of Housing Benefit to landlords rather than tenants is back on the table, according to Welfare Minister, Lord Freud. In a speech to the National Housing Federation conference, he said that landlords will receive benefit payments directly as part of the new universal credit system. If their tenants fall into rent arrears, Lord Freud said that the main aim of this measure was to protect the credit ratings of housing providers and enhance their ability to borrow and invest. Trials will commence shortly, with the policy expected to be implemented in 2013.
Lord Freud said: “I remain absolutely convinced that there are mechanisms available that will allow us to introduce a single universal credit while also providing protection for the housing sector.” But don't get too excited. He also confirmed that payments to tenants would remain the norm and payments to landlord would only come into place for about 10% of tenants who are considered the most at risk.
The announcement comes hot on the heels of research from Policis, that showed 90% of social housing tenants actually want their housing benefit paid directly to their landlord. These findings were published in Inside Housing.
The universal credit is a coalition government landmark policy. It will combine all a claimant's welfare benefits into a single payment. It is hoped that this simplification will streamline the welfare system and cut costs.
The chief executive of the National Housing Federation, David Orr, called for more flexibility: “Why not give people the choice to ask to have their rent paid direct to their landlord? Retake the opportunity for individual tenants to choose to have their rent paid direct, then we will be with you all the way.”
Whats the news? If a Local Housing Allowance tenant is more than 8 weeks in arrears then the payments will be made direct to the landlord.
I agree what is new this is already in place through most landslords don't know this and
LA sometime are not quite to provide this information
The housing benifit scheme is & has allways been ill thought out.
We(as landlords.) dont get involved any more because the left wing officers in the benifits office pretend 1 thing & do another.Thier surrounded with rule walls.Let common sense prevail please.
The landlord who put thier lives behind there freeholds, are led a line.The money involved does not make sense.
Our, Deacades long benifit experience as landlords tells us to keep well away from the benifit industry.
Thiers a dozen ways the claimants can deny the landlords there rent.100% of the claimants(in our case) will find a reason not to pay.
The residents will be qualified in finding the loophole.Thus keeping the benifit cheque themselves.
Residents then in 99% of the time use the money, to spend on smoking, & or drinking+ drugs.etc etc Some smoke £800 p.c.m, in fags.(after tax)
We started as landlords in 1970 & speak from, bitter experience .
Were also chartered builders, & are proud of the service that we provide to the, many "working" people, & families that we deal with.
We reckon that most landlords arnt now interested in providing decent housing to none workers since the, left wing do gooders altered the benifit system in the recent past, enabling the landlords not to have a say in where the rent funds 1st go.
Even when its arranged, in writting that the cheque comes direct to the landlord, the claimants can divert those funds with a mere phone call to the benifits office.
Those funds are then diverted away from the person who pays the mortgage, towards the residents (to spend on drugs).
The owners wont find out for weeks that the funds been diverted.No official bothers to advise the landlords.
Once the funds are spent,thiers no way the owners can arrange repayment.I Wont go into the courts.Too long winded.
What would you do if you were in the gutter either 1)Pay the landlord or 2) pay the drug dealer.etc ?.
We can hardly evict them easily can we.?
They might as well pay the drug dealer, & or publican etc , & enjoy thier lives @ the expense of the ever poor landlords.
Thats the way the law is.
We are family people & Were speaking from an 1000 bad experiences, in this housing industry.
The benifit officers have all the answeres, which never seem to be in the landlords favour.
Thank heaven thier now working on "changing" the system- thanks to "real" people like Ian Duncan Smith.I.D.S. Knows where the benifit funds ends up.Read I.D.S. Work on the subject.
As for single parent claimants!. Ill have to write a book on that "game."
Thank I.D.S. For bringing sense into the system.Roll on the new laws.
stephen paul byrne ltd
I fully agree with these sentiments and, for one, will never, ever rent to non workers. It is time that the present government stopped sitting on the fence and realised the problem exists for private landlords and rectified the system for the benefit of all.
Lord Freud wants to get in the real world.
Warning to ALL landlords that receive LHA payments directly from the tenant.
If whilst you are in receipt of LHA directly from the tenant you could have ALL the LHA paid to you directly recovered from you by the council.
This is because if there is a change in domestic circumstances of the LHA application was a false claim the council WILL come to the landlord for repayment of the LHA.
That is why you should NEVER accept direct payments of LHA.
You will never be privy to any of the reasons or any ongoing circumstances relating to an LHA claim.
The first you will know about it is a demand from the council for repayment of ALL LHA paid to you for that tenant as a resulof the council determining that the LHA was not valid.
Therefore if a LHA tenant has not paid you for 2 months then you arrange for a tenant's LHA to be paid directly; you then start the process for evicting the tenant.
Of course you will already have issued a Section 21 notice; differnt ones if in an AST period or in a SPT period.
You could use the SECTION 8 process as your LHA tenant will be 2 months in arrears if within an AST period.
You could therefore have the tenant evicted and claim court costs and the rent arrears under the Section 8 process.
It is highly unlikely the tenant will pay the 2 months of rent they have not paid you which means you could start possession proceedings.Obviously whilst all this is going on you will be in receipt of LHA directly.
Hopefully this will be for a short period as if you have to refund incorrectly paid direct LHA payments the lessor period is better for your finances.
You hopefully will recover your property in about 10 months.
Then you get another tenant.
If you wish to risk another LHA tenant you advise that if they do not pass on LHA to you and you have to apply to have it paid directly then you will evict them, irrespective of whether LHA is subsequently paid directly.
Any LHA paid to the claimant diectly which is subsequently found to be a false claim will mean the council HAS to try and obtain the monies from the tenant and NOT the landlord.
Best still don't take on LHA claimants; for a start they have to have an AST before they may make a claim for LHA.
As a landlord you would be mad to give an AST to someone who may be unsuccessful in the application but who by then is in your property.
If unsuccessful they will not leave your property and then you have to use the useless county court system to evict the non-rent paying tenant.
Lord Freud is mad to think that landlords are going to want to risk losing their properties and the income by taking on LHA claimants.
Usually these issues are divisive, with logical arguments on both sides. Since I've been following this debate however, I still can't see any reason for housing benefits to be paid directly to tenants. Does anyone know the logic? I've heard it's to teach people on lower incomes how to manage their own money. nice idea, but not at the expense of their own personal welfare (i.e. not being able to find a home given landlords won't rent to them)
There are undoubtedly many complicated issues involved in housing benefit, and welfare in general, but making it simpler and safer for landlords to do the right thing feels like a no-brainer to me.
M
How would you treat an honest, reliable, respectable, mature, educated, decent, responsible, law abiding adult, from a highly respected, good family living overseas, with a good reference from his/her previous Landlord and a clean CRB Record who:
1(a) Is in receipt of Jobseekers' Allowance and Housing
Benefit and NOT a Drug Addict or Alcoholic
1(b) Was in 2011, placed in temporary accommodation
by a Council's Housing Options Mental Health
Pathway Move On Team, because of insufficient
Social Housing and Private Rental Scheme
Accommodation available, after vacating his
previous accommodation, as a result of his Landlord
arranging for the property to sold, where he/she
had maintained his tenancy well without:
* Damaging the Landlord's property,
* Incurring Housing Benefit Rent Arrears
* Receiving Antisocial Behaviour Orders
during his tenancy period
2(a) Who has accepted an offer from an established,
reputable university to study for a four year,
part-time, evening BSC Degree,
2(b) Where he/she has registered as a student of that
university and obtained a valid Student ID and
Student Union Card,
2(c) Who will be in receipt of Housing Benefit for this
Degree Programme, since he/she does not qualify for
the same funding and special Student Bank Account
facilities, as a full-time, university student?
I assure you that this is a real individual whom I know well, and therefore would appreciate your constructive, helpful advice.
Thank you.
I refer to my previous post; it does not matter that your person may be above reproach; it is the system which exposes a landlord to risk with an LHA claimant.
Personally I would not wish to risk my personal financial circumstances on a LHA claimant; therefore I will stick to Private tenants who will have to qualify for RGI or I won't take them on.
Why should I risk everything just because someone's personal circumstances end up with me not receiving rent and/or having to pay it back.
People such as yours are not best served by the LHA system.
If the council guaranteed to a landlord that even if the claim resulted in being rejected even years later that they would not seek recovery from the landlord if he was in receipt of LHA directly then I would consider renting out to LHA claimants.
However there is the CATCH 22 issue of how does a LHA claimant obtain a tenancy as he needs a signed AST before he may make a claim for LHA.
What landlord in their right mind is going to give a signed AST to a tenant before the landlord knows whether they would be successful in the claim.
This as if unsuccessful do you imagine the failed LHA claimant will move out of your property? Highly unlikely as the tenant knows it could easily take 10 monbths to evict them.
I appreciate that there are lots of good people who would be good tenants on LHA; but it is the system which puts landlords at risk.
I cannot afford to take such risks. So I will stick with my private tenants who will be paying 2 months rent as deposit; 1 months rent in advance and who will be required to sign the electoral roll form; agree to their details being shared with tenantid and landlordreferencing; undergo credit checking.
Also they will be advised that I will be contacting the council tax register to confirm the occupants at the property every 3 months.
This as I have experience of tenants attempting council tax fraud.
They get caught out as they don't expect the landlord to check the register after the landlord has advised the CTAX dept at the commencement of the AST.
I have addressed all these issues to Grant Shapps.
Do you imagine the reply in any way addressed the issues......Yep you've got; absolutely not.
I even include a upad link to an article to further advance my concerns.
Govt is in complete denial and seems to think problems that I have mentioned only occur to 5% of landlords; and so what?? should they be concerned.
That is why I won't take on LHA claimants; nothing personal but you aren't worth it.
This as I could lose everything.
I have already been stitched up by LHA claimants to the tune of £57000.00.
I flat repossessed with another repossession going through with a potential loss of another £60000.00
Any wonder why I would not wish to take on LHA claimants!!!?