Stung by the £500pw Benefit Cap, no rent being paid – Help!

Bill

One more post to say thank you to you

IO
Very strange perspective you have.
You seem to think it is effectively acceptable to breed as much as you like and desire to live in an expensive area; all on the state!!
Such views I find offensive and somewhat to the left of Lenin.
The Welfare State is a fantastic facility which assists all people and that is as it should be.
However it is NOT there to facilitate a 'lifestyle' without having to work for it.
Your weird views are not what the majority of the population believes.
The state is there to support NOT to provide a domestic circumstance that those of who are in work can only dream of
Those that don't work cannot expect the state to provide everything where the tenant would like to be.
You would expect the state to pay for a flat on Park Lane if that is where the tenant and her 6 kids wanted to live.
Your attitude is why the govt has brought in the OBC.
It should have occurred 45 years ago.
LL who have relied on the ambivalent attitude of govt who shelled out unending streams of benefits have now seen the effects of the OBC.
Mick has highlighted this situation which is a wake-up call to LL who have relied on the gravy train of HB.
It is still possible to make money but using different types of domestic situation.
the days have now thank god gone by which you could knock out as many kids as you like and ALL benefits would be provided.
I reckon Mick will be shrewd enough to work out that certain tenants he needs to remove and replace them with more viable HB tenants.
Effectively those with the smaller families.
Nobody in their right mind could object to the OBC and BT.
HB tenants can no longer expect their comfortable 'lifestyles'' to be supported any longer.
Mick has found this out and his tenant demographic will inevitably change.
There is nothing right wing about any of this; it is just the economic reality of where we are.
Benefit recipients need to be forced back into work.
If you recollect 'workfare' was initiated under the DEMOCRAT Clinton administration.
We need a similar system here or rather the same result however achieved.
To imagine that my views are to the right of Ghengis Khan is most peculiar.
They are the views of most people in the UK.
Welfare should be a hand up and NOT a hand out.
Mick has discovered the rules of the game have been changed; I'm sure he and others will be shrewd enough to work out how the system may be manipulated to his maximum advantage; just like all those bankers and big commercial institutions do.
Certain tenant types who have large families will find they have to move or suffer.
There is nothing right wing about that.
People in normal jobs have to make such decisions every day.

I suggest you stop reading the Guardian and look seriously at the economic plight this country is in; we CANNOT afford the spiralling costs of HB
So change is being introduced and not before time!!

I would also suggest that these tenants who will be affected by the OBC need assistance in managing their domestic circumstances.
After all £341 pw is a lot of money.
The TV programme 'Superscrimpers' show how to manage on a limited budget.
Most of us could do with a domestic budget makeover.
These tenants types are usually socially dysfunctional which is usually why they have so many kids!
They need helping and then their budgets could be made to stretch and could well mean they won't have to move.
Perhaps the local WI could send someone round to give guidance.
Yes it might mean cheaper cuts of meat and using charity shops and no fags; booze or Sky TV.
But she had the kids; it wasn't the state's fault, the old saying is so pertinent here, she has made her bed and now she has to lie in it!!
I reckon most of these tenants if they really reviewed the way they live could reduce their outgoings to be able to afford the rent where they presently are!!
If they really can't then so be it they will have to move to a cheaper area.
I fail to see the problem
Benefit claimants have NO god given right to retain their existing domestic circumstances irrespective of the reduced benefits they now receive!!

Yes, £500 is the total amount allowed, but then to not pay the correct LHA rate to the Landlord to ensure rent & mortgage gets paid & subsequently roof stays over her & 6 kids head-One would think Govt would allow direct payment of WHOLE LHA allowed & then for he to manage with the shortfall-As we know, some tenants think about rent last, after their cans & fags.

If u refer to bracket, are u telling me they should be paying me the whole LHA rate allowed? Because everyone else says different.

I don’t believe this is a tribunal or Ombudsman case, I’ve won many of these. I was instrumental 15 years ago in forcing Govt to bring in permission letters for Landlords & tenants & councils.

Yes, I’ve done the Ombudsman complaints about direct payment to tenant where spent rent & received compensation many a times.

I used to spend hours with all tenants helping them budget, not enough hours in the day, & 2 weeks later, they back to same old ways because u can’t spend 24 hours a day with them.
I’m doing reduction.

Yes, tenants do need to think about having less kids, but some are vulnerable & just do not think, so many need a safety net because they don’t think sensibly & with common sense like some of us.
The problem in this case, there is virtually no 3-4 bed house ANYWHERE cheaper than what she is in.

This limit as I’ve said before shouldn’t have been done retrospectively-Too late now, they’ve already got the kids. Govt should have said ‘Ok, all new families, u have any more kids & we ain’t paying for ‘em’-People then may think twice before popping another out thinking they get another £50 CTC & £15CHB per kid.

There’s a saying ‘If u save when you’re 7, u save when you’re 37’. Very hard to change habits when you’re older unless u get A LOT OF HELP which ain’t there all the time’.

Trying to put politics aside, what I can't understand is why LHA is the first of the benefits to be reduced under the £500pw cap.

Food and shelter are the basic requirements for Human existence, surely any welfare should be based on that?

Maybe I'm missing something but logic tells me that benefits should be allocated as follows:-

1) Rent direct to landlord

2) Food vouchers

3) Utility meter cards

4) Anything else

The only ways to increase number 4) are then to find less expensive accommodation or to find gainful employment.

In the early 90's, when I was struggling financially, I rented out my home and then rented a much smaller, much cheaper property from another landlord. That made a difference of £200 pcm and I survived. I also had to turn to friends and relatives for occasional support as well as getting up at 6am on Sundays to do car boot sales to raise a bit of extra cash.

If there were no benefits at all, save for the most severely disabled and frail elderly, what would happen? I suggest two things, there would be two groups, the honest and the dishonest. Could it be that fear of Policing the latter group which has allowed the Welfare budgets to bring our Country to it's knees?
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Mick,

If you read Adam's post at the start of this thread and my follow-up @ 8.26 we jointly set out what your options are. You asked for help - follow the advice given rather than question it.

Part of my original post states:

"As to direct payments there’s nothing much I can add, other than to say, DWP will not deduct anything from the person’s DWP/HMRC benefits to hand over to the landlord in such circumstances. Currently, there are limits to how much can be deducted from DWP benefits to make payments to “third parties” for arrears of rent, council Tax, fines etc. At the moment, that figure is based on 15% of the Single Person’s JSA rate (£71 circa) i.e. around £11 per week. The limit is designed to ensure that the claimant’s income still covers daily living expenses but this doesn’t include the rent. Universal Credit will almost certainly have limits so in similar type cases the “direct payment” facility will also be seriously undermined.

It should be clear from this that "direct payments" is not an option. The DHP fund is your tenant's best option, but can only offer temporary relief.

My references to the current "direct payment", safeguarding, appeal rights etc. was to simply address the misconceptions expressed in earlier posts that there was no longer any "rights" and to highlight the fact, that under UC those rights have been diluted through the lack of regulation and having no ability to appeal to an independent tribunal.

Your case is only one of 50,000 such cases, the vast majority being located in greater London, due to the generally much higher rent levels. In your case, the Cap kicks in primarily because of the size of the family. Child Poverty Action Group (CPAG) tried to overturn the Benefits Cap legisaltion because it discriminated against large families, ethnic groups etc. but that JR failed. So I'm afraid we're stuck with the legislation, whether we agree or not to its fairness and its adverse impact on landlords like you.

This is my last post on this topic.

Bill Irvine
HB & UC Advice
http://www.ucadvice.co.uk

Reply to the comment left by "Mark Alexander" at "09/08/2013 - 07:31":

A very commonsense response from MArk.
His logic is overwhelming.
The way the system actually works just shows you how govt despises LL by NOT allowing them FIRST to take the rent out of ANY benefits the tenant receives.
If the tenant starves then tough; the LL must be paid FIRST.
There are always food banks etc.
But it would be blindingly obvious to the tenant that the only way they will have more of their benefits to spend; would be to MOVE to a cheaper area.
WHAT is political about that!!???
As it is presently tenants know they can take the proverbial out of the LL who would take months to evict them.
With UC introduction the LL will receive very little direct UC.
I can't believe Mick is going for rent reduction to solve things.
This is a big hit he would take.
I'm sure he could source some working tenants!
On principle I would boot this tenant out; I would not have a tenant sticking 2 fingers up at me because she knows the system favours her.
There are plenty of other decent working tenants out there.
They deserve decent properties like Mick offers.
I say to Mick help the ones that appreciate you and offer to working tenants!!
Get rid of the dross you already have that are taking the proverbial out of you..........................YOU don't deserve it!!

Little wonder why LL are exiting the HB market!?

Govt is reducing LHA first to wash their hands of, get Landlords to tidy up the dirty mess, tenant still gets their money for food & Govt hopes problem will go away-Already big changes in local Homeless offices now. In last 2 weeks from 2 weeks ago, no one in offices knew anything about the cap, some have been called in for training, some are confident on discretionary, & even some HB staff on the normal phone line now know about it-2 weeks ago, they didn’t.
I am currently in argument mode with my other tenants who are going to be affected by this cap in next 2 weeks-Was with them yesterday, shocking they get £310 CTC a week, £87 CHB, £45 JSA each. £487pw, plus for the last 5 years their rent & Council Tax, approx £687pw IN THEIR HAND. What’s that, approx £900pw before Tax-For laying in bed till 10am & no transport or food costs to get to work. They just cannot understand how they can pay £150pw out their £487-And this is big 4-5 bed house, so no rent reduction happening here. Again homeless or pay. He says he can’t get 24 hours pw job-It’s more hours for couple. They have no disabled kids.

Yes Welfare should be based on that, so putting politics aside, it is politics the Govt that at moment is ignoring Welfare state, because approx 80-90% of public are in favour of these cuts, so it’s a vote winner, but as we know, welfare should be there for the shelter.
Water companies take their money direct from people’s benefit. We have pay as u go elec gas meters because people can’t budget, but Govt thinks last 25 years payment history of DWP tenants means nothing. Wait till Universal Credit comes in & they HAVE to get the WHOLE lot in ONE payment ONCE a month-£2000 in one go, WOW, majority of that gonna’ be gone first week, party time, more drink & drugs. Less food at end of month. Gratification postponement is not one rule they follow.

I don’t blame u for doing your last post Bill, otherwise we could keep posting forever-You’d like that wun’t u Mark ha ha. So Bill thanks for your explanation of the regs/readings etc. Along with Thanks to all the others that know their bit-Be good if someone could put David Cameron up against the wall & say ‘Hello, do u know what is happening on the bottom?.

I have & will do rent reduction, but to how much? She won’t find a 3 bed in Nottm for less than £120pw-Except Council of course, & as I have a waiting list as long as the peleton in the Tour De France for 3 beds at £126pw, I shouldn’t really be going less than £120pw, should I? I will help them stay in there, as to me, when someone moves out, lot of work.
Ha ha, she does appreciate me, just blind to the fact that rent is more important than fags or taxi’s.

Mick,

You've lost me on this part.

£120 per week equates to £520 per month
£126 per week equates to £546 per month

There are some very nice 3 bed properties in the Notts area for that kind of money, I've got some.

A quick shufti on Rightmove shows over a hundred in Nottingham alone.

Or do you mean that no other landlord in their right mind would let to someone who prioritises fags, booze and taxis higher than the rent?

I've not replied earlier on this thread as you asked for advice from experts that know more than you and I don't fit the category.

But as a few nutters that know nowt have commented with nothing to contribute, I'll stick my oar in as well.

This isn't about what is fair and reasonable, it's about politics. Instead of working with you to find a solution, the councils want you to fail for their own ends. Even if the dolly on the desk pretends to be your best mate, the council powers that be certainly aren't.

You need to take steps to protect yourself and your good tenants. If you go under, where will they live?

Serve section 21's now and act on them selectively if this pans out badly.

Cherry pick future tenants with your head, not your heart.

I'm not getting drawn into an argument with the nutters on the politics of letting to benefits tenants, but let them consider this on a practical level;

I have benefit tenants.

One couple have been with me for 10 years and they will be with me (or my heirs and successors) for another 30. They pay the rent, keep the place spotless, decorate themselves to a good agreed standard and don't piss off the neighbours. Even if they won the lottery they wouldn't want to move, it is their home. And I'm not worried they will lose their job as they haven't got one to lose!

I could possibly get a bit more by letting to professionals but they would (probably) move on every few years. Two months void and a months rent for a decent refurb.
Not including interest or lost opportunity costs, I will be 15 grand better off than with a professional let over the 40 years on that property.

Course there are risks involved, as with everything, and all benefit tenants are certainly not the same, despite what some will say. Get the right benefit tenant and they can be a goldmine.

I don't advocate just letting to benefit tenants BTW, as I like to spread risk, but concentrating on just one demographic is no riskier than only letting posh flats to Yuppys in pretentious city developments (I've got some of them an all!).

If that has bamboozled anyone, just think on this bit;

40 years rental income with no voids.

Reply to the comment left by "HB Welcome" at "10/08/2013 - 12:06":

Thanks for chipping in and adding a new dimension to this discussion. Even though I don't operate in the housing benefits market I can totally see where you are coming from.

Choosing good tenants is a matter of common sense. However, as we know, common sense isn't all that common!

I have always found that if I price my properties at the right level I always have a number of prospective tenants to cherry pick from.

One of the first questions I ask is what they are looking to move. That tells me a lot. I ask a lot more question too of course and if I like what I hear I arrange a viewing.

Once I have met a prospective tenant who likes my property, and who I like the look of too, I find a good reason to visit their home. I learn a lot from that, especially if they have children or pets. I spend at least half an hour chatting with them, all the time I am at general cleanliness, the back of doors for scratch marks or damage, the state of the garden etc., all whilst listening intently to what they are saying to me.

Only at that stage, assuming I am satisfied, would I consider referencing.

Some landlords are lazy and skip all of these steps. They think referencing, insurance and RGI is the be all and end all. It isn't! Insurance and RGI might help to underwrite some risks but insurance policies go up the more claims that are made and RGI doesn't pay out once a bad tenant has eventually gone. Rental voids and hassle are inevitable with every bad tenant.

I don't buy RGI. That's because I have worked out that my reserves are sufficient based on my historic experiences of problems and the premiums are greater than the costs of the problems I encounter. For landlords with just a few properties and minimal reserves I do think RGI is a good idea but it is certainly not the holy grail some landlords think it is.

I'm not into the housing benefit market as I rent posh properties to posh people, that's because I focus on long term capital gain as opposed to high cashflow and yields. Having said that, I do still manage to live off my rental profits, although it took me 20 years to get to that level.

If I was in the market to let to housing benefits tenants I don't think I would do very much different at all.

I would continue to look for decent people, ideally with children settled into a local school and with well trained pets. They are the people who make a property a home and stay a long time, regardless of their social class.
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