It has been amusing recently to see Premier League managers finally highlighting the stupidity and ineptitude of football journalists, from LvG, the Manchester United Manager, pointedly asking the journalist whether he actually has a question to Nigel Pearson of Leicester telling a journalist he is stupid and must be an ostrich.
As landlords we have always had to live with shameful reporting by journalists with no understanding of our business, exacerbated by inane logic from organisations like Shelter and Generation Rent, but this month the Mirror appears to have surpassed all of the previous reporting with its 'expose' of the 'Housing Benefit Millionaires in YOUR area'
They have a pie chart that shows 'Where does all of that Housing Benefit money go?' which shows that 100% goes to the Landlord and nothing to the tenant - it implies this is a crime and landlords should be charging tenants less so they can spend their Housing Benefit on useful things like holidays or Sky TV!
The article is based on an FOI request to see who the landlords are in each area who get most Housing Benefit paid direct to them - their logic being that these landlords are the greedy ones taking millions from the nations coffers. They report, "The Mirror can exclusively reveal the names of over 6,000 people who receive hundreds of millions in government benefit money every year. Some may be trusts or charities, others are private individuals. Some are millionaires."
Unfortunately, what The Mirror fails to realise is that the information they have shows those landlords who have chosen to help the nations most needy and least able, those who cannot budget for themselves and who, for whatever reason have got themselves into arrears. The sensible option for many landlords would be to issue a Section 8 and evict but these landlords, instead have worked with their local authorities to get payments paid directly and thus to safeguard these vulnerable tenants.
As our own Julian Clokie states in response to the article:
1) As stated in the Mirror article only safeguarded (landlord direct) rents are included. The proportion of rents that are safeguarded was 30% in Portsmouth when we last asked.
2) Safeguarded rents are only for tenants who have been in arrears or live chaotic lifestyles and are considered by the council to be vulnerable and having the cash in their hand would or could lead to trouble with gambling or other addictive behaviours. Very large arrears can exist.
3) Rents in these cases are substantially below average rents. Local Housing allowance (LHA) ie Housing Benefit (HB) is set at the 30th percentile. The median rent ie 50th percentile is worked out by the valuation office after extensive surveying and documentation.[median=one sort of average and defined as the middle value of the rents if every single rent is listed and the middle value counted out]. The median is generally below the arithmetic average (mean)
4) As soon as you have more than a few properties staff costs and repair costs absorb major proportions of the total.
5) The sum given is the total gross amount paid to the tenant and when safeguarded paid directly to the landlords. This sum paid to landlords does not include repayments to local authorities by landlords for housing benefit claimed in error or fraud. Such amounts are subtracted from the actual sum paid.
6) The list includes agents some of whom might be landlords as well.
7) Following the sell off of much Local Authority Social housing (Council houses) the remaining housing stock has been insufficient to house those unable to buy their home. As there are no capital costs falling on the state when the private sector takes over these tenants the cost of its provision is being provided by the private sector. This lack of housing will be exacerbated if the other section of social housing provision the registered social landlords (RSL) also called housing associations are sold off as has been suggested by one or other political party.
As the Guardian recently reported; Councils are having to bribe Landlords "offering cash payments of up to £4,000 to accommodate homeless families as a shortage of social housing forces authorities to court the private sector with taxpayer-funded incentives." If providing rented accommodation for benefits claimants was so lucrative, surely more landlords would be jumping on the bandwagon. They are not, they are leaving this sector of the market in their droves. Unless your property is in an undesirable area or in poor condition you get less than the market rent, you may get no deposit, you get rent in arrears with a high proportion falling further behind, if you want to sell your property or the tenants damage it, it is tricky to get them out as they would have nowhere else to go. The Local Authority is likely to advise them to sit tight until a court evicts them.
Perhaps the Mirror researchers would be more usefully employed looking at the real economics of housing benefits claimants to a satisfactory standard rather than drawing incorrect conclusions from a very incomplete research.
Written & oral information and advice from the Portsmouth & District Private Landlord's Association is given in good faith, but no responsibility whatsoever is accepted by the Association or it's officers for the accuracy of it's information & advice nor shall the Association be held responsible for the consequences of reliance upon such information.