With the Autumn Statement focusing primarily on boosting the luck of first time buyers, it is no secret that many landlords and tenants are feeling unsure about their prospects.
However, with a 400,000 new homes planned for the UK market by 2020, and a budget of £2.3billion in the purse ready to prepare a varied landscape of new homes, surely there will be enough stock to suit everyone?
Well, possibly not.
Until the recent changes, UK house builders were under obligation to provide a percentage of social housing in all new developments. This was essential in order to obtain planning permission. According to the new Housing and Planning Bill, which is being passed through Parliament at the moment, all councils will have a legal duty to ‘guarantee the provision’ of starter homes ‘on reasonably sized new development sites,’ however, there is no necessity to provide any affordable social housing properties any more.
This lack of new stock is enough of a blow to the thousands of tenants who find themselves on council waiting lists, but the Autumn Statement issued another blow. The controversial Right to Buy scheme, initially introduced by Margaret Thatcher, allows existing council tenants to buy the property that they are currently renting from the council, and was reintroduced by George Osborne.
Whilst the scheme is not currently available to everyone, eventually 1.3million tenants will be eligible to take advantage of the scheme. Since the Chancellor’s announcement in the Autumn Statement, over 200 households a day have registered their interest, with the main areas being Birmingham, Leeds, Sheffield, Southwark and Greenwich.
This scheme, coupled with incentives by central government to free up funding by selling off local authority housing when tenants no longer require the property, is set to have a significant impact on the number of available social housing properties.
This depletion of stock, and increase of privately owned property will make a real change to the UK property landscape, however it is important to remember that there will always be a requirement for social housing. Many landlords feel that the Autumn Statement has landed several blows to the Buy to Let industry, but the changes to the social housing landscape may offer many landlords light at the end of the gloomy tunnel.
If your property adverts frequently feature the words ‘NO DSS’, you’re not alone, but now may be the time to reconsider this viewpoint. Letting to a tenants on benefits is a very different kettle of fish to a private tenant, but it’s not a painful system. And when done correctly, can lead to a great long-term tenancy!
There are a few differences with a DSS tenant to tenant who is renting privately:
- Assume that you will be paid in arrears: This is nearly always the case.
- You are unlikely to be paid directly by the Local Housing Authority: Changes were made in 2008, so you are likely to be paid by your tenant as you would normally.
- Deposits: Don’t expect your tenant to be able to produce a substantial deposit quickly. Many councils will help produce a deposit, but this can be a time consuming process.
- Fraudulent claimants: We have all heard horror stories of fraudster claiming benefits – if a tenant is fraudulently claiming, councils may try and claim money back from the landlord.
- Check your policies: Some buy-to-let mortgages and insurance terms and conditions do not allow landlords to let to tenants on benefits. Check your policies before proceeding.
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