Tenants and Housing Benefit and the lender

I feel quite strongly about the discrimination against types of tenants as I have managed a mixed portfolio for years.
With human beings there are always issues at some point.

However I will give you two examples which I reflect on when faced with discriminatory lenders. (I only use insurers who include DSS);

We have in one property two wonderful tenants... Who have rented their home for 5 years and chose to because it was 3 doors from 'Mrs Tenants' mums house. So we knew it would be a long term situation and as we always allow pets, (high retention), the rabbit therefore moved in too! So there you have a nice long term investment... Both parents working etc rent paid on time. House well looked after. But then 2 years in Mrs Tenant gets breast cancer... And is very very ill, Mr Tenant has to go p/t and housing benefit is quite rightly claimed. No issue for us just some financial juggling with rent paid at different times, small arrears and disablement adjustments to the house.... No real issue for us as we count our blessings that we are not faced with such awful health worry. However then we tried to remortgage and found the DSS discrimination... I made a written complaint to the underwriters, had a number of heated debates and won !!! They even adjusted their policy admitting that it was a ridiculously discriminative situation...

A few years along, the house is still immaculate, the arrears long paid off and our tenants are still with us. The rabbit too!

So no I don't worry about the lenders.... I lock horns and I win.

Second example;
Mother and only child/son move into a property, both employed. After about a year son (33), suddenly tragically passes away. Mother understandably has a breakdown, very very sad and heartbreaking. But the rent is still paid fully and on time. Mother never disclosed to landlord the change in circumstances from full time to claiming housing benefit. However after a year or so landlord (me), is called upon to adjust the rental contract to just one name. I guess this is for housing benefit. However, I choose not to disclose this to the lender because my tenant is so reliable and is shortly moving back into full time work.

Personally I would challenge the lenders and if need be change lenders, all sorts of circumstances change for people. As a hands on landlord I get all my tenants whom admit to claiming HB to permit me permission to speak to HB which helps all involved. my priority is to have a reliable, long term tenant .... Not to decide to make someone homeless just because of daft outdated policy.

I agree with Lise you sound like a good Landlord and very reasonable.
In my case I'm dealing with many low to lower middle rental property. I can not have a housefire and not be insured it would ruin me financially and possibly God forbid in other ways.therefore I have to pay a premium for all my properties to be insured for HB.This cost will be passed on to some degree to the customer and it pisses me off that as with utilities (prepaid meters) credit card and finance rates, the poorest have to pay more for the same goods as the more affluent.
I think this is a simple solvable problem. Insurance companies should not be able to charge for home insurance based on your income

TMW once refused me a mortgage for a beautiful newly refurbished flat because it adjoined a hairdressers (this WAS back in 2011 though).

In the event of an insurance claim, do insurers who will not insure "DSS" tenants actually look into tenants' income source/occupation in the event of a claim? Or perhaps they will only do this if vandalism or extreme negligence is suspected?

Even if they don't typically make such enquiries, it could still come out in the course of an investigation - for example, a tenant could make a statement to the effect that they spend all day at home because they don't work.

I therefore think landlords could be at risk of invalidating their policies; it would be interesting to get the opinion of someone on here who works in the housing insurance industry.

Reply to the comment left by "Mandy Thomson" at "10/03/2016 - 19:20":

I know from making a couple of fairly big claims over the years, fire and flood, that loss adjusters are hired by insurance company and part of their job is to find loopholes just like that

Further to this, this conversation has got me worried (as we have had the occasional tenant claiming LHA in the past), so I double checked the application I filled out for our insurance. One of the questions asked is, "Is any of the property occupied as: Holiday accommodation, bedsits or student accommodation, hostel and/or
OCCUPIED BY TENANTS ON REFERRAL FROM THE DWP OR LOCAL AUTHORITY, any commercial enterprise or leisure facilities e.g. gymnasium/swimming pool etc?"

In other words, "DSS" tenants are not excluded completely, only those on local authority/DWP referral schemes who are often people with very serious issues such alcoholism and drug addiction problems.

Hi Paul
I get where your at, try other insurers like LV and Cover4u. Don't bother with Direct line.

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Reply to the comment left by "Lise Willcox" at "10/03/2016 - 20:34":

Thanks Lise I'm a bit of a veteran at this and I always end up going back to the same insurer I use simply business and they use uk general. I was just venting a bit.
It was the utility report this morning that set me off, and I tied it in with my insurance.
it's simple to me. Don't charge the poorest the most for the same product.
Sorry getting a bolshie in my old age your supposed to be more concervative

This is a really interesting read. One question that I would like to raise here is - does the clauses referred to about "DSS" relate specifically to Housing Benefit? I ask because when I went to re-mortgage one of my properties, the new mortgage deal had a clause that simply stated that I wasn't allowed to let to anyone claiming benefits. I rang to query this clause and asked them about benefits; did it specifically refer to Housing Benefit claimants or anyone claiming any benefits? The answer was anyone claiming any benefits. I asked if that included anyone claiming Child Benefit and the answer was yes. I asked if they would remove that clause or if they would amend it to exclude HB claimants only and they declined. Needless to say that I found another lender because to exclude anyone claiming any benefit would mean that I couldn't let to anyone with children. The goalposts have move since then but I think it would be worth asking the question.

I was about to post the same thing Ollie, "DSS" doesn't just mean Housing Benefit, it means any benefit including Child Benefit, something I get myself as I have a child.

It's worse than that though because I specifically asked the question: "What happens if my previously employed tenant loses his job and starts claiming benefits?"

The answer: "You must evict them."

Simply shocking.
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Reply to the comment left by "Colin McNulty" at "15/03/2016 - 10:08":

And everyone is wondering why we have a desperate problem with homelessness! As you quite rightly say - shocking.
Again, it is the big boys calling the shots! ie: mortgage brokers and those who hold the purse strings!