Within the co-living/HMO sector, there are some landlords who refuse to accept any tenant who is receiving housing benefits. Their view is that even if the person is gainfully employed, as some recipients are, they will be unsuitable tenants and may be unable to pay the rent or will damage the property.
If the principal aim is to receive the rent as agreed and for the tenant to look after the property, whether the rent is paid by the local council or out of the person’s salary should not be the primary concern. The important thing is the integrity of the tenant and their ability to honour the terms of their rental agreement.
We have been managing properties for over twenty-five years and know that a bus driver who is temporarily laid off and receiving housing benefits is just as likely to look after the property as a young professional worker that wants to party every night. Integrity is not the sole domain of the better off.
As for receiving the rent regularly, arrangements can be made for the local council to pay the rent direct to the property manager or landlord. This ensures payment is made irrespective of the ability of the individual to do so.
The important thing is to vet the applicant correctly and this applies whether it is a lower rent property in greater Manchester or an apartment in Mayfair. This is where an experienced property manager is needed to ensure this is done properly. With the right approach at the outset, most, if not all, of the problems can be avoided.
Of course, some people will feel that at the lower rental levels there is more likelihood for the property to be used incorrectly through over-crowding, etc. This was certainly the case of rogue landlords who dominated the sector a number of years ago and still operate under the radar today. The stories of an extended immigrant family of six adults and children on housing benefits and living in a rundown two-bedroom unit still surface occasionally.
Nevertheless, we believe that each tenancy application should be looked at on its own merits and that there should be no blanket refusal of housing benefit tenants. It all comes down to the individual applicant.