Q&A: What if my tenant’s housing benefits don’t meet the rent?
What if my tenant’s housing benefits don’t meet the rent?
Housing benefits are a tricky one and this is exactly the reason why a lot of landlords don’t want to rent to people on housing benefits.
With the squeeze really on regarding benefits, it’s a necessary question to ask, as research suggests that in 90% of instances, benefits are no longer enough to cover the rents they were originally designed to pay. Which rather defeats the purpose of them!
The shortfall can range from £25 a month on a single room in a house-share outside London to a whopping £260 a month for London based homes. While that sounds a lot to catch up on monthly, over the course of the year, we’re talking thousands in debts, which only wracks up more stress and anxiety for both you and your tenant.
So what are your options?
The tenant could make up the shortfall themselves, if they are in a position to do so. Perhaps they have friends or family who could help out on a regular basis, or even savings they could dip into. However, both of these are finite options, so a frank conversation about how long this could realistically last is needed.
Alternatively, you could reconsider the rent. Now, hear us out on this one! If your rent is just above the housing association rate, consider adjusting it down so it falls in line with what you know they can afford.
It’s likely they’ll be looking to stay long term, so even though you may lose a little each month, you are potentially gaining a long-term reliable tenant – and they are worth their weight in gold!
There is a third option if your tenant had already moved in before this became an issue, as they can apply for a discretionary housing payment. There are some cases in which tenants can apply for additional housing benefits if the amount that they are receiving doesn’t cover their rent.
Funds are decided on a case-by-case basis and awarded by the Housing Executive, which will decide how much money is to be awarded, as well as how long it be granted for.
The onus is on the tenant to prove they will fall into financial hardship if they do not receive the additional funds and the HE will consider multiple elements before making the final decision.
Ultimately, there are a lot of options available to both you and your tenant. As always, it’s about keeping the lines of communication open and working together to find a solution.