Social Housing Crisis

Social Housing Crisis, This Is The Worse It’s Ever Been.

In May last year I did a TV programme called The One Show, where they filmed me serving a section 8 notice on a LHA tenants at 7am, they had kept the landlords rent of £4,000. This piece was about the launch of the trial version of ‘Universal Credit’, which I warned would be not be appealing to landlords. Under the ‘Universal Credit’ scheme, the tenants would be paid their LHA, with other benefits on a twice monthly or monthly basis. This  means that many tenants who were unable to manage their money, or were in debt, would ultimately fail to pass on the rent to their landlords.

The ‘Universal Credit’ scheme has  been delayed and is now supposed to be launched in 2015. I read recently that £621million so far had been spent on this pilot scheme, trialling with less than 2000 benefit tenants in Greater Manchester. There has also been a debate that the IT system built to manage the scheme, is not working properly and indeed is not fit for purpose.

The Housing Benefit /LHA systems have been constantly changing for landlords in the last few years.

It all started to go wrong in 2008, in my opinion. The previous government decided to issue direct payments of Housing Benefit to tenants instead of landlords, to empower them, so they could take responsibility for their own budgets. This resulted in mass arrears, subsequently causing more evictions and those tenants being made homeless. I should stress however that there are many benefit tenants that can manage their finances. Statistically an LHA tenant will look after a property better and stay longer, which landlords like.

Then in 2011 this government introduced the capping of housing benefit, which made sense, because we have come across cases, of some landlords before the cap coming in, making over £4k a month on a 3 or 4 bedroom houses in some London boroughs. This of course resulted in landlords serving section 21 notices to end tenancies, as the cap became too low in some cases. Frustrated landlords evicted the LHA tenant and rented out to private tenants.This did not present an immediate problem, as rents were rising and it became a landlords market, governed by supply and demand, especially in London.

We have heard of situations recently of families being moved from London to Stoke On Trent  and this can be upsetting and unsettling for those concerned. This will happen more and more, because currently we have council waiting lists running from 10-20 years  and not enough properties being constructed. It is currently  estimated that we need 200,000 extra homes a year to be built, which has never been achieved. The argument constantly heard is that tenants should only live in a place that they can afford.

There is also an alarming temporary housing crisis, many councils are struggling to find people temporary accommodation. We have heard of some desperate families ending up in Premier Inn Hotels. By law someone is only supposed to be put in temporary housing accommodation for up to 6 weeks.

On top of all of this we now have the ‘Bedroom Tax’. When an extra room at a property is not used, it is taxed and families are having their benefit cut, resulting also in an all-time high in the use of food banks.  The government has set up a fund called Discretionary Housing Payments (DHP) to help councils deal with hardship cases, and many councils have turned down three quarters of the people asking for help. As an example Leeds City Council spent 105 % of its budget, more than £2m, by 12th February and still had to turn 2,200 people away. This equates to almost 40% that applied for help under DHP.

I outline my main fears below-

We know what’s going on at the sharp end of things, as we act and speak for landlords on a daily basis. More and more of them are evicting LHA tenants and are stating that they plan on exiting the LHA market entirely, the reasons are as follows;

‘The tenants housing benefit has been capped and I’m not getting the rent I should be getting.’

‘The tenant has been told to stay in the property by the council, so they have to obtain a possession order, so they can be re-housed.’

‘The tenants benefit has been withdrawn.’

‘The tenants have kept the housing benefit and not passed it on.’

‘I can get more rent on the open market, not renting to an LHA tenant.’

Lastly the biggest issue I have with  LHA’ Universal Credit’ is this. Cutting benefits may or may not get people back into work but more likely it is going to have an opposite effect. More people will be evicted, because of cuts in benefit and landlords not wanting to rent to LHA tenants, because of the fear they won’t get their rent.  If the landlord has the security that the LHA will be paid direct to them, then that’s a good start. I’m sure the councils would welcome it, not draining their resources and putting extra pressure on already overstreached arrears departments and having access to more landlord’s properties. Landlords will also opt to stay in the sector rather than leaving and renting exclusively to private tenants, where demand is very strong and shows no signs of slowing down.

Precise Treatment Reduces Pain

Detail needs experts. Expert time is worth it when it saves you a costly mistake. Main objective: Get the property back. Best action: Very precise treatment.

Serving a notice is actually the most important part of the possession process.

It isn’t complicated but one tiny error can cause dreadful problems.

That’s why we say, don’t DIY and don’t use internet amateurs. It’s not worth it.

1. Compliance Errors
If the tenant doesn’t leave at Step1, the notice had better be valid. Because then it has to go to court. Any little error can get a case thrown out. And you have to start all over again.

2. Attempting Short-Cuts.
In an effort to be quick, some internet services aimed at landlords are using short-cuts around the process. But if the tenant doesn’t leave (50%) these practices can backfire at court and the case thrown out.

3. Trying to Save Pennies.
Internet services have mushroomed and landlords can expect to get what they pay for. To get the process done PROPERLY it takes a certain amount of time for an expert to look over a file and be accurate. Our fees cover that expert time.

Chasing courts for dates, arranging advocates and preparing court papers is time consuming. Especially if you’ve never done it before.

Some landlord and agents have served notices themselves. They believed they were saving a few pounds but it often ended up costing them more.

If you lose a claim, the court can order you to pay the tenant’s defence cost, which can run to hundreds or thousands of pounds.

Our in-house Solicitors are there to get your property back as fast as they can. And we protect landlords and agents from themselves.

As experts, we know that in the rush to get things done, errors can happen. And those errors can can come back later to mess up your case – and the whole process has to start again.

You can speed things up – give us accurate information quickly. Help us to help you.

There are services on the web who will prepare papers BUT they get you to pay the court-fee separately and get you to sign the court papers – so in fact they don’t represent you!

If your notice (at Step1) wasn’t drafted or served correctly you risk wasting your court fees and losing a whole lot of time because of a small error.

We won’t let your case anywhere near a court until we have checked every little detail. To make sure you don’t waste time or money, at Step-2 we first only charge part of the fee.

If your notice is fine, then you just pay the balance of the fee and we issue the claim. If there is a problem with your notice or paperwork, we will advise you what to do next.

Courts take the view that possession proceedings can make someone homeless. So they are very careful. If there’s any error in the notice, they throw the case out. It’s the process. Get it right or lose.

If the notice is invalid, you have to start all over again. The weeks or months you’ve waited are wasted. If there were rent arrears, there are now more.

If there weren’t rent arrears, they might now start. More fees. More lost rent. And still no possession. Tenants can be alerted to making a counter-claim.

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