Some landlords won’t let to DSS tenants under any circumstances, but others recognise that not all DSS tenants are going to wreck the house and turn it into a crack pad. In fact, some DSS tenants have more regular, stable incomes than employed people and may be a better bet for a buy-to-let landlord. So how do you sort the wheat from the chaff?
Delays in Payments
One of the key factors with DSS tenants is that they are dependent on the efficiency of the benefits systems which pays them. Universal credit has acted as a gigantic spanner in the works here. Because it involves a switch from the previous benefits system to a new set of processes, it was always going to be difficult, but add in the necessity to alter computer systems, which has never been a strength of government, and you have a recipe for tenants who are not getting the money they need to pay their rent.
This is not their fault, and if they were employees who had not been paid because the banking system had gone down, there would be abject apologies on their behalf. However government appears to think that not paying claimants is a risk-free activity, and government has also decided that DSS tenants who live in private rented accommodation are now personally responsible for paying housing benefit to their landlord.
Clearly, if there are delays in processing a person’s claim, they will not get their housing benefit on time and will be in a position where they must pay the landlord late. DSS tenants are people who are in receipt of housing benefit. How much they get depends on their circumstances and any other income that they have.
But tenants are usually very clear with landlords about the amount of benefits they receive, because if they manage to secure a tenancy, they need to inform the Housing Officer of the new rent that they have agreed to.
Poor Publicity has Affected the Better Tenants
Many tenants who are claiming benefits and want to pay landlords rent from their housing benefit are in their current situation through no fault of their own. They may have been diagnosed with a serious illness that has meant they could not continue in work. Or they may have lost their jobs, been unable to keep up their mortgage payments, had to sell their house, spent the resulting equity in private accommodation and finally ended up claiming housing benefit. Anyone dealing with lettings and Manchester property in general will have come across these cases.
Unfortunately, some reality TV programmes have given the impression that anybody claiming any kind of benefit is a drug-addled waster who will trash the property and leave without paying six months’ rent. This simply isn’t the case, any more than employed people who appear to have a lot of income are really faking it and waiting to sublet the property to another dozen tenants.
In the employed sector and the DSS sector, there are good and bad people who may make excellent or dreadful tenants. The key thing is to be able to distinguish between the two.
How to Get a Good DSS Tenant
One of the things you need to look for is any disparity between the amount that the tenant is receiving in housing benefit, and the amount that you are charging. The tenant has to make up the shortfall every month and if they are disabled or have no access to extra income, they are going to find this extremely difficult. So, to avoid rent arrears, make sure that your tenants can afford the rent from their housing benefit.
Make sure that you have a suitable landlord’s insurance policy in place and don’t gloss over the fact that you are letting to DSS tenants. Yes, they are slightly higher risk and you may need to pay a slightly higher premium but let’s face it, these tenants tend to be renting in areas where property is cheaper, and therefore rental yields are higher. Just accept slightly higher insurance as the cost of doing business.
And always meet the tenants personally. Your gut feeling is probably a better guide than any risk assessment. Look at why the tenants are dependent on DSS payments and you’ll get some insight into whether they are seeking a secure home or are irresponsible and likely to cause you problems.