Find your next rated tradesperson
Find a Tenant The Business Pages for Property Investment Current and archived property articles Join in our Property Investment and Landlords Forum and have your say! return to my property power team home page Services for Landlords Buy to Let mortgages and legals Find your next investment Prosper with Property Education Property Investment networking opportunities
articles > What Benefit is there in Social Tenants?
Article > What Benefit is there in Social Tenants?

Article kindly supplied by

Upad sponsors of mypropertypowerteam

One of the questions we hear from tenants most often is where can I find a landlord who'll let to tenants on housing benefit? As many as one in ten renters may be receiving benefit, so when these tenants represent such a huge proportion of the market, why do so many landlords state "no DSS" in their adverts – and are they right to do so?

For some, it's because they have no choice. Some buy-to-let mortgages and some landlords' insurance policies state that they cannot let to tenants where the rent will be paid by the benefits system. So if you'd like to keep your options open, check for this before you sign on the dotted line.

For other landlords, though, it's more about the perception: "too much hassle," as one told us recently, "too much paperwork, and tenants who don't look after the place."

Not true, says James Davis, Upad's CEO, who's been renting to housing benefit tenants for more than a decade. Tenants on benefits tend to stay longer: there isn't nearly the same churn, which in turn saves on lost rent and re-advertising your property. Tenants on housing benefit make the place their home, rather than just seeing it as one step on the road to buying their own place. People having their rent paid by benefits are no more likely to not pay their landlord than people who are working: bad tenants come from all walks of life. Key to successfully letting to housing benefit tenants is referencing them as you would anyone else, and understanding how the system works.

Know the system

The current system of housing benefit payments changed quite dramatically from 7th April 2008: we'll be assuming your tenancy began after that date.

Your tenant will be in receipt of local housing allowance: unlike housing benefit previously, this is paid directly to the tenant, who is responsible for paying the rent themself. LHA is calculated at a flat rate, based not on rent payable, but on the geographical area and on the size of property the household is calculated to require. For example, a single person already renting 3-bedroomed accommodation would be assessed for LHA as needing one bedroom only.

In the event of a shortfall between LHA receivable and rent payable, the tenant will have to either cover the difference themselves, or move to a cheaper property. It's in your interest, therefore, to know what maximum LHA rates are for your area: the website will help you to calculate what might be payable for your prospective tenants.

In April 2011, this will change again, with LHA being capped at £250 per week for a one-bedroomed property and £400 for a four-bedroomed property. The current five-bedroom rate will be scrapped altogether. Obviously this is going to hit some landlords harder that others: those in London and the south-east are most likely to be affected, but landlords from all parts of the country have told us that their current rents are above the proposed caps. Before you take on social tenants now, you need to check what the position is going to be from next April.


If it all goes wrong

If your tenant is eight weeks or more in arrears, you can ask for LHA to be paid directly to you. While this is obviously not an ideal situation, it does highlight one advantage of housing benefit tenants: after eight weeks without receiving rent, private sector landlords are just beginning court proceedings to evict their tenant, and may be in for several more months without payment. In the case of tenants deemed to be vulnerable, the Council may decide that LHA can be paid directly to the landlord right from the beginning: this can be the case for tenants with a history of financial difficulties, gambling or substance addictions, learning difficulties or inability to speak English. If you think this might apply, then speak to your local housing benefit office as soon as possible. Which brings us to what may be the best bit of advice of all: always stay on good terms with your local housing benefit office.




Know your tenant

Because the tenant isn't the one who's ultimately paying the rent, some landlords have not bothered to take references prior to starting the tenancy. This is a mistake, because the tenant, at the moment, still holds the purse-strings. Even if they have no employer, you can still talk to their last landlord. As it has been known for landlords to give positive references to terrible tenants just to get rid of them, taking a reference from their last-but-one landlord might be a better idea.

Other landlords opt to get a guarantor, so that if the tenant absconds with the LHA money, they have someone else to chase. If you go for this option, then do reference and credit check the guarantor too.

During the life of the tenancy, plan for regular inspections of the property: arrange these in advance with your tenant, and present them as checking up not on them, but on the property: it's your duty, after all, to ensure that it's properly maintained. But you'll also want to keep an eye out for obvious changes in your tenant's circumstances: have they moved in a partner or a housemate, or got a job? If LHA has been overpaid, the Council will come after you for the overpayment, and leave you trying to reclaim the unpaid rent from your tenant, so this is common-sense self-preservation on the part of a landlord.

Though the system of renting to housing benefit tenants might look daunting at first, it can be a lucrative source of long-term, stable tenants whose rent is paid on time: which is all any of us want. is the UK's largest online lettings agent. See your property listed on 950+ top UK portals including Rightmove, for just £69 until let.

To find your next tenant CLICK HERE



Upad sponsor mypropertypowerteam



Bookmark and Share


My Property Power Team recommends Upad, the UK's largest online lettings agent.

Upad sponsors of mypropertypowerteam

Upad's Rental Property Marketing helps you find a tenant for your rental property quickly and easily, by distributing your ad to over 500 top UK property websites. To find your next tenant CLICK HERE

Some Key Stats

* generates on average 14 enquires per listing.

* has built the largest rental property marketing distribution network in the UK

* has the largest database of private landlord customers of any online lettings business

Upad sponsors of mypropertypowerteam


Access the Business Directory

© 2019 My Property Power Team | privacy policy | terms & conditions | contact us | advertise |