Benefit tenants set to lose by Government attack on Landlords

I don't see how the Government can argue with these facts; so they just completely ignore the issue. I'm looking forward to some kind of back-tracking soon - either when they realise how idiotic their approach to the PRS is or when they are forced to by the legal challenge.

Its interesting, those that are providing housing to those on benefits are I would say those with higher LTV on interest only mortgages, the yields can be higher which is what attracts people but so are the risks...

The governments removal of mortgage interest as a 40% expense will hit this type of landlord the hardest and there will definitely be less housing available to those on housing benefit. I also can't see institutions being interested in this area of the PRS and I can't see councils being able to fill the gap.

Another example of why the section 24 tax is ill thought, hopefully they will react fast to the consequences once they realise the problems it will cause.... Don't bet on it though.

I totally understand people prioritising more secure tenancies. That's just good business sense and especially so considering the tax increases. However, surely something would have to give. There isn't a sudden and comparable increase in reliable people looking for rental accommodation so won't it just result in a greater volume of voids for some landlords? I guess that's the market!

Yes it is the HB tenants who will suffer. My pain is thankfully minuscule compared with theirs . I do a lot of HB. The government is an excellent payer of the LHA providing the entitlement is there. There is a provision to pay all payments direct to me which was created by an amendment to the HB regs which came into force April 2011.

As a result all my LHA payment are paid direct to me and as such the income stream can be less volatile than some working tenants who lose jobs / relocate / decide to buy stuff on occasions rather than pay me. With HB you can also get enhanced yields due to the way the payments are structured. The rate goes with the person not the property so sometimes you can get for example a 2 bed rate for a studio flat which can outstrip what a working tenant would pay.

The clause 24 will hit me as a high leverage landlord but that is irrespective of whether my tenant class is HB or working. My tax bill will rise 5 fold because of my chosen model which is clearly unfair and hopefully will be judged illegal

But Clause 24 isn't what leads me stop to renting to HB . What is and will potentially stop me is.....

1) LHA rate has been frozen for 4 years while private rents have rocketed making HB increasingly non competitive
2) The advent of UC which reverts the payment back to the tenant and therefore creates more instability / uncertainty
3) The benefit cap which increasingly makes renting to larger families problematic
4) Working tenants are flooding into traditional HB territory because of lack of housing so tenant choice is enhanced

This has and will continue to lead to vast sections of the most vulnerable within our population unable to rent in the private sector. The government cannot and will not provide social housing fast enough to keep up with demand so a bottleneck situation evolves in B&B and low grade hotels which costs the taxpayer far more as a result. The knock on effect as they become ill means the NHS bill rises and as hunger kicks in more turn to stealing food etc to survive and so the court / prison bill rises. All these hit the taxpayer in the end.

I was doing the government and the taxpayer a favour by housing HB. I bore all the costs of maintaining that property If the boiler broke and it needed a new one I would foot that £1500 bill rather than the taxpayer. Now that cost will revert to the taxpayer again. Institutional investors do not and will not want many of my tenants.

My HB tenants will be left in no mans land because of the cruel shortsighted policies of this government. What makes it inhumane is they know exactly what they are doing But by freezing LHA for 4 years and also increasing my tax bill over 4 years it is akin to stretching both landlords and tenants by a form of slow medieval rack torture. I can fortunately untie myself and walk away with my profit but it is my poor powerless HB tenants who are and will continue to suffer and be trapped and eventually strangled by the system which should be there to help them.
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Reply to the comment left by "Jonathan Clarke" at "28/05/2016 - 05:13":

Hi Jonathan.
That was an excellent and eloquent summary. I keep meaning to do an article on this, so if I do, is it okay if I quote from your post and use your name as the landlord in question?

Reply to the comment left by "Dr Rosalind Beck ." at "28/05/2016 - 09:18":

Hi Ros

Thank you and please feel free to quote away.....
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Sean Graveney says:
"There isn’t a sudden and comparable increase in reliable people looking for rental accommodation so won’t it just result in a greater volume of voids for some landlords?"

There is, and probably will be for the foreseeable future, a constant, steady increase in people looking for rental accommodation.

About half a million population increase last year, a large proportion of whom looking to rent.

In light of the current attack on landlords, whether effected or not, will you really be supplying your rental properties at below the price for demand?

Reply to the comment left by "Monty Bodkin" at "28/05/2016 - 21:12":

Also,when working tenants lose their jobs and have to sign on, they won't get enough to cover the rent and some will lose their homes as well as their jobs.

Reply to the comment left by "Monty Bodkin" at "28/05/2016 - 21:12":

Not at all, and I didn't suggest that anyone would or should do that either.

I was just pointing out that landlords may well prioritise other tenants (and it would be sensible to do so) but there isn't a sudden increase in that type of tenant so it won't be possible for all without voids. Not sure why that is controversial or anything to do with 'supplying rental properties at below price'.

Reply to the comment left by "Sean Graveney" at "29/05/2016 - 11:31":

No, not a 'sudden' increase but a constant increase.

Which is already happening.

About half a million population increase last year, a large proportion of whom looking to rent.

Increase in demand, decrease in supply.

Your point only stands if demand was staying the same or falling and/or supply was staying the same or increasing.

Not controversial, just incorrect.