Landlords are being told to proceed with caution when letting to tenants who claim housing benefit, according to Lettingagent.com.
Lettingagent.com has also called on the Government to change the ‘cumbersome’ housing benefit system to make it work better for tenants and private landlords.
Lee Grandin, managing director of Lettingagent.com, comments: “Many landlords refuse to accept tenants on housing benefits. This is not because they are discriminatory; it is just that the Housing Benefit system is so cumbersome.”
There are three major areas, according to Lettingagent.com, which landlords should consider before renting to a tenant claiming housing benefit.
Firstly, landlords should check if the amount of housing benefit is enough to meet the rent. In some cases, local councils will not pay the full rent and landlords should ensure the tenant earns enough to cover the remainder.
Secondly, landlords should be aware the first payment of housing benefit can take as long as 12 weeks so landlords should ensure they receive advances from the tenant to cover this period.
Lastly, landlords should be made aware that housing benefit is changing to a Local Housing Allowance in April 2008. Lettingagent.com says the system could be problematic for landlords as rent is now paid to the tenant, rather than straight to the landlord, meaning the tenant could spend the money before paying their rent. The system also pays on a bi-monthly basis, which could be inconvenient for landlords who need to pay their buy-to-let mortgage on a monthly basis.
Grandin says this problem is making things unnecessarily difficult for landlords and as a result, many of them are not keen on renting to tenants on housing benefit.
“If the Government want to see more buy-to-let investors housing tenants on benefit – they must improve the housing benefit system to make the venture work for landlords”, he adds.
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