5 ways for landlords to ensure payment of Housing Benefit

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5 ways for landlords to ensure payment of Housing Benefit

Postby gardenlaw » Tue Oct 18, 2011 8:50 am

As tenants demand outstrips rental housing the way Housing Benefit is paid has become a crucial issue for landlords. As Landlordlaw blog puts it

"One of the problems with housing benefit, or local housing allowance (LHA) is that it is, by default, paid direct to the tenant. This is one reason why many landlords do not want to take in tenants on benefit.
Landlords can demand direct payment if the tenant falls into arrears of over 8 weeks. However landlords will generally prefer rent to be paid direct to them from the start so that the arrears never happen. Here are five ways that this can be done."

This link to the blog is worth a look for all landlords http://www.landlordlawblog.co.uk/2011/1 ... g-benefit/
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Re: 5 ways for landlords to ensure payment of Housing Benefi

Postby juliet » Thu Oct 20, 2011 8:51 pm

Direct payments are about to be abolished if the Government get their way. It is proposed in the localism bill but being challenged by housing providers. It was welfare action week last week and people were urged to write to the Government to oppose it. If they do get abolished it will be an absolute nightmare for landlords. Lots of tenants will probably just spend the money on other things as there are some difficult decisions for families at the moment with price hikes.

Obviously loads on google about it but this was the first one that came up

http://www.housing.org.uk/publications/ ... r_dwp.aspx
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Re: 5 ways for landlords to ensure payment of Housing Benefi

Postby despair » Thu Oct 20, 2011 9:02 pm

The result of that stupid idea will be many more people giving up letting their homes because they simply cannot afford a tenant defaulting on rent when its needed to pay the mortgage on the rented house
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Re: 5 ways for landlords to ensure payment of Housing Benefi

Postby juliet » Thu Oct 20, 2011 9:11 pm

Exactly....homelessness (if that is a word) will just get worse and worse. One worry though, is that who will the landlords sell to? No one can get a mortgage. But the Government have thought ahead and councils will be able charge what they like for empty homes in terms of council tax. It might end up easier to let people live in your house rent free. Sounds mad but I am convinced we are heading for trouble.
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Re: 5 ways for landlords to ensure payment of Housing Benefi

Postby Treeman » Sat Oct 22, 2011 1:16 pm

despair wrote:The result of that stupid idea will be many more people giving up letting their homes because they simply cannot afford a tenant defaulting on rent when its needed to pay the mortgage on the rented house


That's a narrow view of things, if you can't make 20 percent on an investment and you don't have any sort of reserve fund leave your money in the bank withthe rest of the proletariat.

Too many " null capital" investors jumped on the lettings bandwagon, then the Market took a downer and when they come to re mortgage they can't get the rates they need to survive and are crying in their beer.

Under capitalised landlords are the worst sort in the industry, if you run HGV's you have to prove that you have the financial reserves to do so. A similar scheme for landlords would clean the industry up a little.


There are a few TV programes that have a lot to answer for
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Re: 5 ways for landlords to ensure payment of Housing Benefi

Postby despair » Sat Oct 22, 2011 5:42 pm

Quite how Treeman reckons you can make a 20% profit from letting a property is a big ?

Its something i have investigated on several occasions and in my area but the figures simply do not add up

Even Estate say that even smallest properties are too expensive for either 1st time buyers or buy to let

I have looked at it again in last few weeks with a view to help out a relative but again the figures simply did not add up
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Re: 5 ways for landlords to ensure payment of Housing Benefi

Postby Treeman » Sun Oct 23, 2011 8:34 am

Once again I find myself your instructor

You need to identify a suitable area, find a property in need of work (the more the better). The less you can pay for the property the better your yield will be.

My recommendation is for terraced properties in poorer areas. They can still be bought cheap enough although prices have increased substantially lately and you have to work a bit harder to find suitable properties.

You should aim for a 20% yield on the initial purchase, what the rental brings will depend on the property and its location.

Most of the proletariat developers can’t see the potential or don’t have the wherewithal to deal with “wreck” properties and are doomed to pay more for “tenant ready” properties which they then mortgage to the hilt and subsequently struggle to find rates which will leave them some profit.
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