What is the problem with renting a property to someone on housing benefits?

[kinkyben]

The wife and I need to move, and rather than sticking our house up for sale during a turbulent time for the housing market, we have decided to let our place out and rent somewhere elsewhere for ourselves.

So, now we are advertising our house privately and we have had a number of people contact us for viewings etc.

Quite a few people have contacted us saying that they are on housing benefit and the like and would we accept them as potential tenants...

Now I have absolutely no problems with this, but does anyone have any experience of this type of thing, or know any reasons why so many people are unwilling to accept people who are on the DHSS.

I don't want people making generalisations about people in that situation, but does anyone know of any actual "legal" issues or potential pitfalls with payment etc?

Thank you!

[Ethel]

Many people won't accept DSS tenants because the amount of rent is capped - you can get more renting privately.

[bednobs]

also, the housing benefit is not paid straight to you -its paid to the person who then pays you. If they are not good at budgeting then you might not get paid the rent

[Ethel]

Housing benefit can be paid directly to the landlord, and most private landlords insist on it.

[Twenty20]

From our point of view its just another complication that we dont need when renting out a property. The rent isnt always paid directly, you can apply to have it paid directly if the tenant goes into arrears but I believe the local authorities pay in arrears anyway. Also, most local authorities wont be paying the full rent but it will need topping up by the tenant, so youre still possibly going to have to chase up the tenant for payment anyway.

Basically, renting out properties is a business and why would you do business with someone who cant afford to pay for it?

[Velvetee]

The house we live in, was purchased from my partner's friend, who's a Property Developer. Before we purchased it, he'd been letting it to the local authority.

The woman living here, had 3 sons, who ran riot, graffittied all the walls, smashed plug sockets, broke the neighbour's windows and their dog chewed the kitchen base units.

Obviously not all tenants provided by the council will treat the property in such a disrespectful way, just as not all professionals renting from you will treat it respectfully, it's just luck really. Saying that, I don't think I would want to risk having local authority or DSS tenants, who potentially will not be able to pay their rent and may wreck everything.

[Velvetee]

Also your insurance premiums may increase or you may not be able to get insured, if you rent to the DSS. I've been ringing round for landlord quotes this week and have been told by all brokers, if the tenants are DSS, then they cannot insure or it will be more expensive.

[obNOXious]

I rent out lots of houses and have several tenants who are claiming benefit and in the majority of cases the rent is paid directly to me, which is in fact easier than many scenarios.
People also do not have to inform you that they are on housing benefit, if they come up good with refs and deposit you'd never necessarily know, so you might end up with someone on benefits whose simply decided it's in their best interests not to tell prospective landlords, as they are frequently treated as second class citizens in the rented housing sector by a lot of agents for no good reason.