Building Society fuels homeless crisis …? | Live Discussions

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Building Society fuels homeless crisis …?
28/02/2013
1:40 pm
newsatlandlordreferencing
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Nationwide have halted new lending to landlords who have tenants receiving housing benefit.

The Mortgage Works, currently with a buy-to-let market share of around 20%, was previously the biggest lender offering such mortgages to landlords with tenants on housing benefits.

Experts have warned that this could leave many people struggling to find a place to live.

A TMW spokeswoman said: “Previously, lending to landlords with local authority tenants was not explicitly referenced in TMW’s lending criteria. Our re-issued terms and conditions make it explicit that local authority tenants are not acceptable.”

Remortgaging decisions for landlords with tenants on housing benefit using TMW should be unaffected as they will be based on rental cover rather than the nature of the tenancies, according to the spokeswoman.

The latest Government figures reveal :

  • 3.8 million households currently live in private rented accommodation
  • 26% of these receive housing benefits (982,000 households)

National Landlords Association head of policy Chris Norris said: “There is a huge market for tenants in receipt of local housing allowance and if the private-rented sector does not help to support housing provision, many tenants may be left homeless.”

Landlord Referencing Services believe that this move is in direct reaction to the Governments new benefits system, which comes into effect this April – whereby benefits will be capped at £500 a week for couples and £350 for single people (including housing benefit). Coupled with the fact that once Universal Credits are launched, landlords will have no option of direct payments of housing benefits going to them anymore, inevitably meaning that there will be even less chance of landlords being paid on time (if ever) – hence TMW revising their lending criteria.

Want to drastically reduce your rent defaults and/or property damages, completely free? (<<click)

Lenders still offering mortgages to landlords with tenants receiving housing benefits include Keystone, Manchester Building Society and Paragon and Mortgage Trust.

  • Will more lenders follow suit?
  • Who will house these tenants?
  • Will this move increase homelessness?

Whatever your views on the matter please share them with the Landlord Referencing Networking Community!

Related discussions:
28/02/2013
2:30 pm
Cedric
Golders Green
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Major question.

If you are a new BTL Landlord and your Tenant suddenly loses his job and moves on to Benefits, how does this affect your agreement with Nationwide if you have expressly agreed not to take on HB Tenants ???

You can't suddenly evict them and in theory this question does not appear to be covered, unless someone can see something I'm missing ???

28/02/2013
2:42 pm
ZepHYoRUS
Guest

ABSOLUTELY FURIOUS!!!!!!!  Trying to move account from Lloydds TSB to Nationwide to avoid BANKERS getting their fingers on my Housing benefit and now NATIONWIDE who made such a big thing about not being a BANK, there for the people and not for share holders do this. It's a Damned Conspiracy as it appears to me. AND the effing goverment wish there to be NO LIMIT on Bonuses for those screwing the whole world. INCANDESCENT!

28/02/2013
7:28 pm
@Inventoriesinc
Guest

'Your Tenant suddenly loses job & moves on to #Benefits ,how does this affect agreement with #Nationwide ?'

interesting – cant evict and surely the AST wont have a canc clause so tricky one Paul- interesting to see what #Nationwide say

28/02/2013
8:28 pm
PaulBarrett
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ZepHYoRUS said
ABSOLUTELY FURIOUS!!!!!!!  Trying to move account from Lloydds TSB to Nationwide to avoid BANKERS getting their fingers on my Housing benefit and now NATIONWIDE who made such a big thing about not being a BANK, there for the people and not for share holders do this. It's a Damned Conspiracy as it appears to me. AND the effing goverment wish there to be NO LIMIT on Bonuses for those screwing the whole world. INCANDESCENT!

For once Z;I absolutely understand you and fully agree with you.

Perhaps one of the smaller BS would be a better home for your money.What about Yoorkshire BS or even Yoorkshire Bank who offer a full chequing account.

I think to find an enthical financial institution as you appear to be trying to source is somewhat fraught!

Co op is supposed to be one of those ethical banks; but I have suspicions of all of them.

Perhaps a credit union might be a better solution.

01/03/2013
10:24 am
@John_J_C_Moss
Guest

'Tenant suddenly loses job & moves on to #Benefits ,how does this affect agreement with #Nationwide now' ? @AskNationwide@NationwidePress

Not often I favour "bans", but mortgagees should be banned from discriminating this way.

01/03/2013
10:43 am
@RealLettings
Guest

Will this move increase homelessness?…

- very possible. At a time when #landlords need some good reasons to stick to letting to HB tenants, the doors keep closing!

01/03/2013
2:41 pm
LyndonBaker
Bristol to Weston-super-Mare
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The reason building societies etc do not want benefit tenants is to protect their investment. They are in business, not running a charity. If the owner defaults on a mortgage and there is a benefit tenant in situ, they are fully aware that the council will advise them to stay put until a court order to evict them. This adds up to additional cost and time for the lender.

Again they are in business to maximise their profits so why would they add to their costs? Perhaps if councils re-homed on receipt of a Section 21, rather than advising them to sit tight, this rule would be relaxed or removed. As PaulR is forever saying, if it was easier to evict tenants for non-payment . . .

01/03/2013
4:07 pm
Mary Latham
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As Cedric has said this cannot happen because NO ONE CAN AVOID A LHA TENANT. At any time a tenant can loose his job, become ill, have a relationship breakdown and need LHA support.

 

I realise that this is fired by Universal Credit but these lenders need to speak to Government not penalise the many good tenants who, through no fault of their own, need LHA support.  Are we now living in a country where when you hit a bad patch you will loose your home? I am already worried for the children will suffer when Universal Credit is paid to just one member of the family.  If that member is not responsible with money or has an expensive habit what will happen to their children?  This is taking us back to the 50's where families suffered when the dominant partner did not prioritise food and shelter.

These lenders are going to cause a social disaster – GOVERNMENT STOP SITTING ON YOUR HANDS ITS TIME TO TAKE ACTION NOW.

 

Paul, Can you PLEASE explain to the lenders how they should insist on landlords using LandlordReferencing.co.uk so that they do not take the bad tenants on LHA but do not penalise the good ones.

I know that Paul will hate me for saying this but the Government should be paying to run this site because it is the only way to sort out the needy from the greedy and to protect the vulnerable.

 

Follow me on Twitter@landlordtweets

Follow me on Twitter@landlordtweets
01/03/2013
4:36 pm
PaulBarrett
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Mary Latham said
As Cedric has said this cannot happen because NO ONE CAN AVOID A LHA TENANT. At any time a tenant can loose his job, become ill, have a relationship breakdown and need LHA support.

 

I realise that this is fired by Universal Credit but these lenders need to speak to Government not penalise the many good tenants who, through no fault of their own, need LHA support.  Are we now living in a country where when you hit a bad patch you will loose your home? I am already worried for the children will suffer when Universal Credit is paid to just one member of the family.  If that member is not responsible with money or has an expensive habit what will happen to their children?  This is taking us back to the 50's where families suffered when the dominant partner did not prioritise food and shelter.

These lenders are going to cause a social disaster – GOVERNMENT STOP SITTING ON YOUR HANDS ITS TIME TO TAKE ACTION NOW.

 

Paul, Can you PLEASE explain to the lenders how they should insist on landlords using LandlordReferencing.co.uk so that they do not take the bad tenants on LHA but do not penalise the good ones.

I know that Paul will hate me for saying this but the Government should be paying to run this site because it is the only way to sort out the needy from the greedy and to protect the vulnerable.

 

Follow me on Twitter@landlordtweets

Govt  and councils are so stupid they think that he PRS will continue to take the hit that HB tenants cause to LL finances.

They don't seem to appreciate that LL are gradually withdrawing from the HB market.

It is a bit like the difference between putting a frog in boiling water, which he will notice or putting the frog in cold water and bringing to the boil.

That frog doesn't notice until too late.

The govt and the councils are that frog!

They will wake up one day to find the supply of PRS accommodation has effectively disappeared.

Then what will they do with all the homeless on the council steps!?

I agree with Mary about network referencing.

In fact iI think it should be compulsory for every LL to ensure that every tenant he has is registered with A network referencing service.

There are others but to have every tenant registered with A network referencing service would be the way govt should push for.

 

01/03/2013
4:58 pm
Mary Latham
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From Telegraph today

 

Nationwide's The Mortgage Works subsidiary had changed its terms and conditions to exclude lenders who wanted to offer properties to tenants on benefits and Local Authority tenants.

However, Richard Napier, the group’s mortgage director, said that the group had changed its mind, following concerns raised by customers.
“The clarification of the terms and conditions, which took place last December, brought The Mortgage Works into line with several other Buy-to-Let lenders,” he said. “This will now be removed.”
“The Buy-to-Let sector is very important to us,” he said. “We have listened to concerns that have been expressed by some of our customers, over the last few days, and believe this is the right way forward for The Mortgage Works, for landlords and for their tenants.”
The decision followed warnings that vulnerable tenants could be left homeless by the decision. The Mortgage Works is the biggest lender to landlords who provide housing to those in receipt of housing allowance. It had lent to these landlords on a case-by-case basis before changing its terms and conditions back in December.

 

Source http://www.telegraph.co.uk/fin…..lords.html

 

Perhaps they are listening to customers but their original concerns have not been addressed – do they now intend to make themselves vulnerable or do they know something we don't know?  I still think that you should contact them Paul they are surely looking for other ways to manage their exposure now?

 

Follow me on Twitter@landlordtweets

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01/03/2013
5:34 pm
Samii
Somerset
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24/05/2011
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In reply to my tweet 22 hours ago;

'Tenant suddenly loses job & moves on to #Benefits ,how does this affect agreement with #Nationwide now' ? @AskNationwide@NationwidePress

@AskNationwide have just kindly replied to me with;

The Mortgage Works has removed exclusion of tenants on benefits & LA tenants from buy-to-let Ts & Cs http://ow.ly/ib0Jz

 

Social Media & Content Manager at LandlordReferencing.co.uk.

Follow me on twitter @LandlordRef

Add me on facebook https://www.facebook.com/samii.landlordreferencing

01/03/2013
6:12 pm
Paul Routledge
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Mary Latham said
As Cedric has said this cannot happen because NO ONE CAN AVOID A LHA TENANT. At any time a tenant can loose his job, become ill, have a relationship breakdown and need LHA support.

 

I realise that this is fired by Universal Credit but these lenders need to speak to Government not penalise the many good tenants who, through no fault of their own, need LHA support.  Are we now living in a country where when you hit a bad patch you will loose your home? I am already worried for the children will suffer when Universal Credit is paid to just one member of the family.  If that member is not responsible with money or has an expensive habit what will happen to their children?  This is taking us back to the 50's where families suffered when the dominant partner did not prioritise food and shelter.

These lenders are going to cause a social disaster – GOVERNMENT STOP SITTING ON YOUR HANDS ITS TIME TO TAKE ACTION NOW.

 

Paul, Can you PLEASE explain to the lenders how they should insist on landlords using LandlordReferencing.co.uk so that they do not take the bad tenants on LHA but do not penalise the good ones.

I know that Paul will hate me for saying this but the Government should be paying to run this site because it is the only way to sort out the needy from the greedy and to protect the vulnerable.

 

Follow me on Twitter@landlordtweets

Mary, I wrote a letter to over 40 mortgage lenders (One of which was the Halifax mortgage works) and explained the importance of them informing their BTL landlords about joining landlordreferencin.co.uk. I explained it was a way they could stop their mortgagees taking one another’s bad tenants and especially ones that were on LHA that did not pay the landlord the rent and caused the landlords to default on the mortgage..

I went on to explain that the service was free and also acted as a deterrent to some tenants who may even think not paying the rent was a good idea and if they did they would struggle to get another decent home.

You would have thought that to protect themselves from defaulting landlords and their landlords from defaulting tenants a free service such as ours would have been at the top of the list. But out of 40 letters I did not get one reply.

It makes no sense that RGI insurers and mortgage companies underwrite policies and lend money to BTL landlords that keep taking the same bad tenants from one another. This is happening right under their nose and they do nothing to bring to their attention a free service that would help them. “madness”

……………………………………………….

Not joined landlordreferencing.co.uk yet? Don’t be left alone when bad tenants are looking for a free home JOIN NOW and become part of the UK’s biggest network site for landlords and letting agents. It’s free, it’s legal and only takes 2 minutes to join..

02/03/2013
7:41 am
Sharon Carmichael
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I have 6 mortgages with the Mortgage Works and am just about to exchange on two more investment properties.  In my time I have always had good and bad LHA tenants and never really considered not taking them if they fitted the criteria, however, with these new conditions I can simply no longer afford nor risk taking LHA Tenants and that is surely going to close the doors on millions of good people who have had to rely on the welfare state (the whole reason it was designed) through no fault of their own.

I do not really do social media but do understand its power and suggest that everybody that is reading this does all the necessary tweeting, linking or whatever to get our politicians to read this thread and act so as to avert another disaster.

There are many good women/mothers who have fallen on bad times due to the failure of their men.  They have worked to keep their families so are we now to exclude them from society due to the actions of a few who will not pay their rent or a Government and Shelter that do not understand (for ease of payment) that there are tenants out there who constantly rip off Landlords.

The reason why this website seems to be growing at an amazing speed is because of demand – the demands of thousands and thousands of Landlords that have had enough and understand the problems first hand.  Politicians TAKE NOTE and avert a new disaster at the expense of decent families who have, through no fault of their own, fallen on hard times. Yell

02/03/2013
8:36 am
Paul Routledge
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Sharon,

I have a young lady tenant who is a single mother, she comes from a lovely family and is well mannered her children are polite and their home is spotless. She is assisted by benefits after her husband became a gambler and to drown the sorrow of his losses started to drink and as the drink wore off so did the money and the work so he became violent.

She eventually plucked up the courage and left and even after numerous attempts to keep the family together she knew the best thing for the children was to go it alone.. She needed our help with our wonderful welfare system to get back on an even keel. She has maintained that she will get back to work and her mother sits the kids in the evening so she can attend night school.

This is not a one off story in Broken Britain it is epidemic however what we do not need to do is tell her on top off her problems that she cannot have a decent home because the government has introduced a policy because they think we can all manage our money. Maybe they should hear her story and walk in her shoes at what her husband did with their money and then tell us we are all capable and equal.

The government should take another look at their mad hatter idea of spending £35 billion on a rail line on a Manchester to London link line to benefit a few and give 350;000 entrepreneurs a £100,000 business loan each and get the UK working again. If this government does not realise its mistakes with Universal Credit "broken Britain will become homeless Britain as well"..

 

……………………………………………….

Not joined landlordreferencing.co.uk yet? Don’t be left alone when bad tenants are looking for a free home JOIN NOW and become part of the UK’s biggest network site for landlords and letting agents. It’s free, it’s legal and only takes 2 minutes to join..

02/03/2013
11:34 am
Paul Routledge
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As just reported by Mark Alexander on Property118.com where he says "It seems that TMW have backed down on this and will now allow landlords to let to tenants on benefits after all. This is to be considered a great win for our industry and shows what the voice of the masses can achieve.

See >>>http://www.telegraph.co.uk/fin…..lords.html

That is good news. Now all we need to do is to get them to tell all their mortgagees about landlordreferencing.co.uk and how they can stop taking one another’s bad tenants free and bingo we may start to let the real deserving good  LHA tenants have better homes and not make them pay for the behaviour of a few bad ones.

……………………………………………….

Not joined landlordreferencing.co.uk yet? Don’t be left alone when bad tenants are looking for a free home JOIN NOW and become part of the UK’s biggest network site for landlords and letting agents. It’s free, it’s legal and only takes 2 minutes to join..

03/03/2013
5:19 am
PaulBarrett
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Do you reckon Nationwide bottled it!!?

Just goes to show still the power of the press and now the internet!!

Nationwide don't wish to perceived as a big nasty institution causing HB tenants to have to be  evicted by their LL because their  mortgage lender insists so……………………TMW!!!

Perhaps other BTL lenders will now withdraw similar discriminatory mortgage clauses!!

As long as the mortgage is paid is surely the key point.

Someone on housing benefit is no more or less likely to not pay their rent than any other tenant type!

As M Latham consistently states correctly everyone is a P45 away from HB!!!

 

 

 

03/03/2013
9:40 am
Paul Routledge
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What is stranger Paul, is that they put these clauses in as a preventative measure because they understand that if the landlord does not get paid they may not either.  I wrote to 40 of them (Including TMW) asking them to email their mortgagees to introduce them to landlordreferencing.co.uk.

In my letter I explained that it was a legal free service that could help their landlords from taking these bad tenants in the first place and would certainly send a message to the others that if they rip one of us off they don’t get a home with the others and with over 100+ members joining a week the odds are getting very slim for those who think they can constantly move around ripping off one landlord after the other.

“Makes more sense than trying to enforce unenforceable discriminatory tenant clauses”  I hear you cry, I did not get one reply..

……………………………………………….

Not joined landlordreferencing.co.uk yet? Don’t be left alone when bad tenants are looking for a free home JOIN NOW and become part of the UK’s biggest network site for landlords and letting agents. It’s free, it’s legal and only takes 2 minutes to join..

03/03/2013
11:38 am
Jahan Khan
Leeds
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PaulBarrett said
Do you reckon Nationwide bottled it!!?

Just goes to show still the power of the press and now the internet!!

Nationwide don't wish to perceived as a big nasty institution causing HB tenants to have to be  evicted by their LL because their  mortgage lender insists so……………………TMW!!!

Perhaps other BTL lenders will now withdraw similar discriminatory mortgage clauses!!

As long as the mortgage is paid is surely the key point.

Someone on housing benefit is no more or less likely to not pay their rent than any other tenant type!

As M Latham consistently states correctly everyone is a P45 away from HB!!!

 

 

 

Sorry Paul I cannot believe that "HB is no more or less likely to pay than any other tenant type" My own experiences bear out that all rent arrears were caused by tenants that were claiming HB everytime. I fully understand that some people lose a job & claim whilst out of work & I don't wish to victimise these people they are what HB was designed for. I think it should be narrowed down to tenants that apply that are HB from day one & were at the previous address that are the highest risk. Its typically single mothers under 25. And yes its really unfair on the one genuine single mother under 25 that applies. If there were real consequences like what this site seems to be alone in creating then LL would be more willing to take on HB

Private tenants that have passed a credit check will always be a better risk as they actually more likely to value their credit status. 

Question to Paul R. Out of the tenants that have defaulted & reported by LL on here do you have a breakdown percentage of HB that defaulted. 

Personally I wish that all the building societies went along with refusing HB claimants. The only reason they are doing it is because they have looked at IDS future UC & realised they will lose millions. They are being responsible to their savers. This would have forced the hand of the government into making sure LL were compensated properly when it comes to these high risk tenants. ALL WE WERE EVER ASKING IS FOR THE RENT MONEY THAT YOU GAVE TO THE CLAIMANT TO BE GIVEN TO US SO WE CAN DO OUR SIDE OF THE BARGAIN PROVIDE HOUSING

Just remember fellow LLs if we fall on hard times & have no money we won't be getting any P45's & eligible for HB because we are deemed to have assets -properties even if they have turned into liabilities.

- See more at: http://www.landlordreferencing…..sis/#p8587

03/03/2013
4:05 pm
Paul Routledge
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Hi Jahan,

You ask “Question to Paul R. Out of the tenants that have defaulted & reported by LL on here do you have a breakdown percentage of HB that defaulted”

No sorry we do not have those statistics but it would be interesting. I might get a data controller to call back the landlords who uploaded the tenant alert over the last month and do a quick 30 day survey..

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