Demand for rental properties that are affordable by tenants on benefits is escalating.
Specialist website DSSmove.co.uk says that despite recent figures showing a rise in employment figures, it is seeing an increase in searches for properties suitable for tenants receiving Local Housing Allowance.
According to the firm, still many searches do not return a property available for LHA tenants, with a shortage across major cities including Birmingham, Leeds, Manchester and, in particular, London.
Aki Ellahi, a Wolverhampton letting agent and landlord who founded the website, believes some agents and landlords are now letting properties to LHA tenants for the first time, but do not always properly understand how the system works. With LHA, the tenant is paid the rent money and is trusted to pass it on.
He said: “Firstly, landlords need to understand the housing benefit system and the payment cycle. For example, for LHA, do councils pay tenants every two weeks, every four weeks, or by calendar month?
“There is no point giving a tenancy agreement that demands a payment on different dates. For example, Wolverhampton Council pay tenants fortnightly on a Monday, so for my properties, I only ever issue weekly tenancies and they both start and end on housing benefit payment dates.
“I have currently 500 tenants on benefits and achieve a rent collection record of 100%. I would not be able to achieve this level of success without the use of credit unions. Using such organisations to collect housing benefit and pay this across to me as the landlord, or to the managing agents, is very convenient.
“My experience over the years has shown me that tenants do not want the hassle of dealing with housing benefit and they want the convenience of it being sorted for them. Although they understand that they need to apply for housing benefit, they prefer if the landlord or an agent can assist them with doing this on their behalf, as this has been the case for as long as I remember.
“The temptation to spend housing benefit can be far too great for tenants and you often find them falling into a debt trap by using housing benefit payments for living costs on a short-term basis – ‘robbing Peter to pay Paul’.
“So by landlords helping tenants to avoid this temptation, and provided the rent is affordable, this is sound reason for a long and secure tenancy to be enjoyed by both parties.”
The site is open to both landlords and letting agents and is free of charge.
Source: Letting Agent Today
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