Posts with tag: housing benefit

Landlord Ordered to Repay £39,000 in Housing Benefit

Published On: January 6, 2017 at 11:12 am

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Landlord Ordered to Repay £39,000 in Housing Benefit

Landlord Ordered to Repay £39,000 in Housing Benefit

A buy-to-let landlord who failed to obtain a license for a House in Multiple Occupation (HMO) in London has been ordered to repay £39,000 in housing benefit, following action taken by Islington Council.

The council ordered Landhouse Ltd, which rented out the HMO, to repay the money it had paid in housing benefit, after the firm admitted to letting the property without the correct HMO license.

Islington Council’s environmental health officers had conducted an inspection of the property, finding it to be overcrowded and badly managed. In addition, fire hazards were uncovered throughout the property.

In a hearing at the Property Chamber – the First-tier Tribunal for London Residential Property – the landlord was ordered to pay £14,140 in fines and costs, as well as repay the council £39,022.52 in the housing benefit claimed during the period when the property was rented without a license.

Landhouse Ltd has now applied for a license, but is still liable to repay the benefit, which will be returned to a central Government housing benefit consolidation fund.

Councillor Diarmaid Ward, Islington Council’s Executive Member for Housing and Development, comments on the case: “More and more people rent privately in Islington, and we’re committed to helping make sure they have decent homes to live in. We will take action when landlords do not keep within the law, and, as this case shows, the costs can be very significant.”

If you rent out a HMO, be aware that you are required to obtain a license from the local council. The Government has made it incredibly easy for landlords to gain a license for their property – simply enter the postcode of the property you require a license for at: https://www.gov.uk/house-in-multiple-occupation-licence

To avoid facing hefty fines and even imprisonment, remember to stick to the law governing the private rental sector. Signing up for free access to our handy guides will ensure that you have all the information you need: /guides/

£2bn worth of housing benefit paid to Scottish landlords in last 5 years

Published On: January 5, 2017 at 2:54 pm

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Private landlords in Scotland have received over £2bn in housing benefit during the last five years, according to new figures.

Data from Scottish Labour shows that on average, one quarter of all housing benefits since 2011/12 have gone to private landlords.

Failures

Labour feels that these figures show the SNP’s failure to tackle the housing crisis and as such has called for greater investment in Scotland’s private rental sector. What’s more, the data has lead Mid Scotland and Fife MSP Alex Rowley to call for immediate action from the Scottish Government.

Mr Rowley said: ‘’I have been calling on the Government for some time to address what is evidently a housing crisis spiralling out of control across Scotland.’[1]

The average private sector rent in Scotland has risen by 14% since 2010.

Rowley continued by saying: ‘Money that is spent on housing benefits should be used to support those that need it, whereas instead we are seeing that money end up in the pockets of private landlords. That is why I want to see a reform of the private rented sector to ban rip-off rent rises.’[1]

£2bn worth of housing benefit paid to Scottish landlords in last 5 years

£2bn worth of housing benefit paid to Scottish landlords in last 5 years

More homes

Mr Rowley suggests that more homes need to be built in order to help solve the housing crisis. As such, he has called for a national house build plan.

Responding, the Scottish Government has moved to defend its track record on housing delivery.

A spokesperson for the Government said: ‘We have an excellent track record on housing and are committed to achieving sustainable, long-term solutions to address housing issues. In the previous session of Parliament, we exceeded our target of delivering 30,000 affordable homes by 10% and our bold and ambitious More Homes Scotland approach will build on that achievement.’[1]

‘We have committed to investing over £3bn to deliver at least 50,000 affordable homes over the next five years and by ending Right to Buy we are protecting up to 15,000 social homes for sale over the next 10 years and safeguarding this stock for future generations. This is accompanied by increased housing subsidy levels and a new rural and islands housing fund to increase the supply of affordable rural housing,’ he concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/more-than-2bn-in-housing-benefits-paid-to-private-landlords-in-scotland

 

Landlords react angrily to Corbyn’s comments on housing benefit

Published On: September 29, 2016 at 9:38 am

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Private landlords have responded angrily to accusations made by leader of the opposition Jeremy Corbyn, over comments he made over housing benefit.

In his Labour conference speech, Mr Corbyn commented that landlords in the UK are being subsidised by £9bn of this benefit.

Figures

Official budget figures for 2014/15 show that total housing benefit spending for social rented tenants totalled £15.2bn, significantly greater than the £9.1bn for those in the private rental sector.

This is despite the private rental sector actually being larger than the social.

The English Housing Survey for 2014/15 indicates that 19% of households are in the private rental sector, in comparison to 17% in the social sector.

Figures on benefit spending by tenure were also published alongside the Budget earlier in 2016. This data shows that the total housing benefit expenditure for the year 2014/15 was:

  • £5,989,000,000 for local authority tenants
  • £9,222,000,000 for housing association tenants [1]
Landlords react angrily to Corbyn's comments on housing benefit

Landlords react angrily to Corbyn’s comments on housing benefit

Spending

Commenting on Mr Corbyn’s speech, David Smith, Policy Director for the Residential Landlords Associaiton, said: ‘Millions of tenants rely on housing benefit in both the private and the social housing sectors, but proportionately far more is spent on social housing tenants than those in private accommodation.’[1]

‘With the private rental market having doubled in size since 2002, it is inevitable that more housing benefit claimants will be living in the sector,’ he added.

[1] https://www.gov.uk/government/publications/benefit-expenditure-and-caseload-tables-2016

[2] Residential Landlords Association Press Release, 28.09.16

Over £9bn in housing benefit paid to landlords in the last year

Published On: August 22, 2016 at 8:57 am

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New figures have revealed that private landlords received around £9.3bn in housing benefit during the last year. This is double the amount they received ten years ago, according to research carried out by the National Housing Federation.

In 2006, some £4.6bn was paid to private landlords in housing benefit. With this figure more than doubling in the last decade, these figures underline the substantial number of private tenants claiming financial help.

Concerns

Findings from the report have raised new concerns about the Government’s policy on moving housing benefit recipients into the private rental sector. The National Housing Federation report suggests that taxpayers could have saved around £15.6bn during the past seven years, if housing benefit tenants had lived in social housing instead of the private rental sector.

Chief executive of the National Housing Federation David Orr said that it is, ‘madness’ that £9bn of taxpayers’ money is, ‘lining the pockets of private landlords rather than investing in affordable homes.’[1]

‘The lack of affordable housing available means that a wider group of people need housing benefit,’ he added.[1]

Over £9bn in housing benefit paid to landlords in the last year

Over £9bn in housing benefit paid to landlords in the last year

Defence

Giving his response to the findings, Richard Lambert, chief executive of the National Landlords Association, moved to defend landlord letting to benefit tenants.

Lambert said, ‘housing benefit is not a subsidy to landlords; it’s a support for tenants to ensure they can pay for their housing. However, the proportion of landlords who let to tenants in receipt of housing benefit has halved over the last five years as benefit levels have not kept up with rents.’[1]

‘The National Housing Federation is clearly still reeling from the news that its member have been ordered by Government to reduce spending over the next four years, so it comes as no surprise that they are looking to shift the emphasis and point the finger elsewhere,’ Lambert continued.[1]

Growth

Mr Lambert went on to say that the private rental sector has actually grown, with the market responding to increased demand for homes. He feels there are a growing number of tenants who are simply not supported by the social sector or housing associations.

‘The private rented sector plays a significant role in providing much-needed homes for tenants so there seems no real benefit in the National Housing Federation taking a cheap shot at landlords. What we should all be talking about is the failure of successive government’s to adequately allocate its housing budget and to incentivise the building of new homes. In the long term, that would be the best use of taxpayers’ money,’ Lambert concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/8/more-than-9bn-in-housing-benefits-paid-to-private-landlords-last-year

A Guide to Letting to Benefit Tenants

Published On: June 5, 2016 at 8:22 am

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Over recent years, DSS (or benefit) tenants have been given a bad name, which has led to many landlords becoming wary of letting to them. The problem is that during the recession, landlords across the country saw more of their tenants struggling to afford their rent payments, and unfortunately DSS tenants seemed to suffer the most.

Universal Credit has also made the situation worse, with many claimants suffering long waiting times in the switchover from the old welfare system to the new. Additionally, a number of DSS tenants have had their benefit allowances cut, and those that live in private rental accommodation are now responsible for paying their housing benefit to their landlords. Even though recent events have made it sound like letting to DSS tenants is too risky, the fact of the matter is that it is necessary, and with careful planning it can even be financially viable. So here we look at everything landlords need to know about letting to DSS tenants:

What is a DSS Tenant?

DSS stands for Department of Social Security, which is now a defunct Government agency that has been replaced by the Department for Work and Pensions (DWP). The DWP is the sector of the Government that is in charge of welfare and pensions, therefore a DSS tenant is one that receives welfare.

Generally, DSS tenants are those that receive housing benefit, with the amount they receive depending on their circumstances and income. When looking for a property to rent, a tenant will usually tell you if they receive benefits up front, as if you agree to let to them, they will have to fill in certain forms that notify their housing officer.

A Guide to Letting to Benefit Tenants

A Guide to Letting to Benefit Tenants

What are the Risks?

One of the main reasons landlords are uninclined to let to DSS tenants is because they have a bad reputation. There are those that believe that someone must have done something wrong or be irresponsible with money if they require benefits, and news stories featuring DSS tenants who have destroyed private rental properties have done little to help matters.

Furthermore, some DSS tenants’ rent is higher than the amount they receive in housing benefits, meaning they have to make up the shortfall each month. This often concerns landlords as it means there is a higher risk of their tenants falling into rent arrears, which they will then have to chase up, or even start the eviction process if it happens on a regular basis.

Why Let to DSS Tenants?

The fact of the matter is that, even though DSS tenants have a bad reputation, it is unfair to tar them all with the same brush. Regardless of whether your tenants receive housing benefits or not, there is always the risk that they could fall into rent arrears, which is why all landlords should have an extensive landlord insurance policy complete with rent guarantee insurance in place.

With the right protection and contingency plans, letting to DSS tenants isn’t too much of a risk, and you may even find it beneficial to your business. Furthermore, those on housing benefits are practically guaranteed to receive a set amount of money each month from the Government, while tenants that solely rely on their salary to pay their rent could find themselves struggling if they are made redundant. In a way, if you negate certain risks, letting to DSS tenants can be more stable than letting to those who do not receive benefits.

How to Protect Your Business

There are a number of ways to protect your business against the risks associated with DSS tenants, including:

  • Creating a detailed tenancy agreement, including information on late payments and rent arrears.
  • Meeting your tenants in person to gain an idea of what they’re like and whether they seem trustworthy.
  • Performing thorough background checks on each tenant, including whether they have ever missed rent payments before.
  • Asking your tenant to arrange having their housing benefit paid directly to you, especially if you are worried about their budgeting skills.
  • Having a contingency plan in place should your tenant fall into rent arrears or you come across any other issues.

Councillor calls for rent caps on benefit tenants

Published On: May 6, 2016 at 11:40 am

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The leader of Southend Council has proclaimed that he is in talks with the Government about the introduction of rent caps for tenants on benefit.

Ron Woodley, an independent councillor, said that his town is being treated as a dumping ground by London borough councils.

Struggles

Local Housing Allowance and the recent introduction of the housing allowance element in Universal Credit has seen many local authorities struggle to find affordable privately rented accommodation for the homeless. This is particularly true in more affluent areas.

Mr Woodley believes that London boroughs are sending these people to Southend as rents are considerably cheaper. Many London boroughs have market rents much greater than the Local Housing Allowance maximum of £26,000.

He believes that private rental charges to tenants on benefits should be reduced to those currently charged to tenants residing in social housing.

Affordability

Woodley observed that this, ‘would save the Government something like £14bn a year in housing benefit and would make housing in cities like London more affordable, so you’d stop the London boroughs sending people out of London because it’s cheaper elsewhere.’[1]

‘In many European countries they have some sort of cap on what people can charge in rented accommodation and I think we need this to stop the private rented sector running out of control, which is what it’s currently doing,’ he added.[1]

Councillor calls for rent caps on benefit tenants

Councillor calls for rent caps on benefit tenants

Dangers

However, Richard Hair of Hair & Son estate agents, based in Southend, has warned of the dangers that interference in the market could bring.

Hair noted, ‘The Government has an appalling record of interfering in the property market and there have been suggestions not long ago by the Labour Party of capping rent. Anyone interfering in any market place does so at considerable risk to the market place.’[1]

[1] http://www.propertyindustryeye.com/call-for-rent-caps-when-properties-let-to-tenants-on-benefit/