Equality laws could affect “no benefit tenants” policies

As a Landlord who rents 99.9% to tenants on LHA (Local Housing Allowance - No longer referred to as DSS !!!) I must say my experience has and continues to be very positive. I generally prefer to rent to clients who claim LHA as I have a good relationship with the local council and issues (seldom few) are often quickly resolved. They should NOT be discriminated against. In my opinion it is often greed for more money that is the hurdle for many landlords. Banks/insurance policies are just excuses. There are plenty of companies out there that allow and accept LHA and students lets. Change provider !!!

There are a group of people that take advantage of the system. We all suffer either directly or pay for there lifestyle some other way. It affects everyone and everything eventually. TV programmes quick to jump on the bandwagon have made popular shows about them.

A Landlord database similar to the DVLA where a tenants credit file and history could be called up needs to be put into place pronto
It really is the only way to go.
A star rating would help.
Insurance companies could come on board.
Essentially “if you ain’t on the list you ain’t comin in” 5 star tenants could be like a 999 score on Experian or whatever

Reply to the comment left by Richard Mann at 27/02/2018 - 07:40
Both already exist.

Rent payments showing on credit reports are quite new and agents/landlords need to sign up for that service so it will be a while before it has a lot of value. The LRS website has been around for a while now though and is the only one of its kind that I am aware has stood the test of time - see http://www.landlordreferencing.co.uk/

Reply to the comment left by Prakash Tanna at 27/02/2018 - 07:38
Prakash it's not greed. It's risk management. My experience with Housing Benefit was far less encouraging than yours. A local authority that deducted money as the tenant was working without telling the LA. I was expected to know. A local authority that wouldn't pay direct after 8 weeks; a local authority that told the tenant to stay put until the bailiffs arrived. £4,500 later in rent and legal costs and a full refurb and I got my property back. So now ( and for a few years since I began letting my own properties and starting an agency) it's been full referencing, and rent insurance guarantee. If the tenant can't pass then it's a fail. The result if this is that over 50 properties we let and manage we have as of today a nil rent balance owing and no late rent. Speaks for itself. And the exclusion of housing benefit tenants by insurance companies is real. It's not an excuse. You may as a larger provider have a good relationship with the local authority but many smaller landlords do not. And landlords themselves when they instruct us will tell us they do not want benefit tenants for that reason. They will be uninsured. Until the insurance companies and the government takes action to make the landlords lot a happier one in relation to HB then many will not accept them. And don't even get me started on Section 24, stamp duty, and other anti- landlord government practices.

Reply to the comment left by Mark Alexander at 27/02/2018 - 07:44Thank you Mark, I was unaware of such a system.
Being in the letting business has meant that many hurdles have had to be overcome.
It follows that connecting with a responsible person to take on the responsibility of managing the rent each month should follow suit.
“DSS” payments can be claimed back too of course, if someone has not signed on or worked or worked additional hours etc.
Data protection is often cited by local councils fair enough but as a Landlord trying to chase up non payment of rents doesn’t help.
99% “DSS” ? Check your lender T&Cs you’re probably in contravention of some or part of them.
Btw far be it being greedy Landlords. It’s about equal respect and meeting commitments.

Reply to the comment left by Gary Nock at 27/02/2018 - 08:08
Gary, you make some very valid points. It's disappointing that your experience with LHA has been unpleasant and I can see how this could put you off. Like you suggest, it's different with different Councils and each tenant/client needs to assessed on an individual basis. I insure my portfolio with Hamilton Fraser with full disclosure of tenant type and their prices are very reasonable.

Reply to the comment left by Richard Mann at 27/02/2018 - 08:26
Hi, the majority of my lending dates back to pre-recession and the mortgage terms are a 2 page document. They contain no restrictions of tenant type. Any new lending is with full disclosure (Lloyds Commercial) and they have no issues with LHA tenants. Some of the smaller lenders may well have restrictions but I don't use them! FYI, The term DSS tenants dates back to the days of Thatcher's reign. They are referred to as LHA tenants these days. 😉

Reply to the comment left by Prakash Tanna at 27/02/2018 - 07:38"In my opinion it is often greed for more money that is the hurdle for many landlords."
Not really. DSS* rates are set at below the lowest 30th% of properties. A landlord with an average property would have to take a 20% cut, along with taking on all the hassle that DSS entails.
But for a landlord with the worst properties in the lowest 10th% it makes sense to take on DSS tenants as they can charge 20% more to compensate for the extra hassle of DSS.
For me, the extra profit that can be made from DSS tenants has not been worth the extra hassle for a long time and as my properties aren't at the bottom end of the market it wouldn't make financial sense to do so.
* Like everyone else vaguely connected to the industry, I know it isn't called DSS anymore, it is just a generally accepted term.

Reply to the comment left by Monty Bodkin at 27/02/2018 - 09:55
Yes I agree the LHA rates are on average 20% lower than the PRS. As a consequence I am obtaining much lower rents that I could if I change my model BUT I chose this model as I wanted to give something back to my community and help struggling families who were in need of good quality accommodation get back on their feet. There is no doubt that i am making less money for myself (and the taxman) this way, but the figures still stack up and work well for me. Some councils offer CASH incentives for taking on LHA tenants which helps towards reduced rents received.

I personally don't see LHA tenants as any 'more hassle' than any other type. BUT I'm sure others have had differing experiences and except that to be the cause for concern/alarm.

Reply to the comment left by Prakash Tanna at 27/02/2018 - 10:10
Well done you, but for the vast majority of landlords, running their business as a charity isn't a viable option, if they did, they would soon go under.

As only 0.1% of your tenants aren't on DSS, maybe you're not best placed to judge which are the more hassle.