When my tenant slipped into rent arrears a few months ago I spoke to her about her spending . I asked how much she was spending per week on her and her daughters food. £120.00 per week came the reply….once she had included the taxi costs back and forth from Tesco!
I told her that I shopped at Aldi and could feed my family of 6 for around £80.00 per week.
“I tried shopping at Aldi” she replied “but it was all in foreign”.
I have also during my work as a benefits officer suggested to people that they shop at Aldi and the response is always negative. “My mum shopped there and got food poisoning” “I’m not feeding my kiddies that muck” are some of the responses I received.
The lack of enthusiasm among people on low incomes for budget supermarkets is astonishing. Aldi after all has won the Grocers supermarket of the year award for the last two years. Their food is fantastic quality and there are times at the till I have felt like I am robbing them when they tell me the price of my shop.
I used to shop online at Tesco and Asda and would spend hours trying to shave pennies of the bill by comparing offers and buying the value ranges. However by shopping at Aldi I save around £45.00 per week. That’s a whopping £2300.00 per year!
So if you are struggling financially they this week give either Aldi or Lidl a try for your full weekly shop. You , and your pocket, may be pleasantly surprised.
1) “The Council has stopped paying my rent”.
The council never were paying your rent . They were paying your tenant a contribution towards their housing costs based on their personal circumstances. Before you start whinging that “the housing benefit is for rent” it isn’t.
Let’s keep this simple
1) Any mortgage is between you and your mortgage company
2) your rental agreement is between you and your tenant.
3) any claim for housing benefit (L.H.A) is between your tenant and the local council. If they become more than 8 weeks in arrears or are classed as vulnerable you may have it paid directly to you. It however is never “your rent money”.
2) “It’s my property!”
Not whilst there’s a tenancy agreement in place . As long as that’s in place it’s your tenants property. Even if your tenants are not paying their rent.
3) “The property must be returned in the condition it was let”.
Minus fair wear and tear . If you think that waffer thin carpet you put down with no underlay is going to be in the same condition after a family has been walking over it for 6 months then think again.
4) “If it’s in the tenancy agreement it must be legally enforceable”.
I have dealt with a landlord who has a term in his tenancy agreements that states
“If you miss a rent payment I have the right to enter the property and remove you and your possessions using physical force”.
Are we suggesting that that is legal as it is in a tenancy agreement given to a vulnerable person? It quite clearly isn’t .
5) “If you wish to remain in the property you must sign a new tenancy agreement”.
Usually this statement comes from letting agents who want to charge both the tenant and the landlord a fee for preparing a new agreement. If the tenant wishes they may simply allow the agreement to roll onto a monthly agreement. If the landlord does not like this then they can start the eviction process. However the tenant never “has to” sign a new agreement to stay in the property.
When I bought my flat in 2006 I was a little naive and believed that the 73 year lease the property had was plenty. It wasn’t. 6 years on and the lease now has 67 years to run and very few mortgage companies would lend on it.
This means that the value of the property is considerably lower as I am limited to cash buyers and investors rather than someone looking for a home.
I am in the middle of lease extensions negotiations and it looks like the whole process will cost in the region of £10,000.00. I have taken out a loan to cover this. I know this is more debt but hopefully it will put me in a position whereby if I need to sell the flat it will not cripple me completely. I’ve been looking on rightmove and strongly believe that a good long lease with no ground rent will make the property stand out from it’s competition.
However the downside of increasing the lease is that I will no longer qualify for Housing Benefit as I’m confident I would have more than £16,000.00 equity in the property. The loan will costs me £180.000 per month in repayments and I receive £450.00 per month in Local Housing Allowance. The net loss to me each month is therefore £639.00 per month.
I know that all the benefits I receive will now go as soon as my claims are all rolled into Universal Credit so my reasoning is I may as well start to live without them now and by doing this it will be a gradual process rather than losing it all in one go.
I’m confident that even with a wife and four children I can mange my finances in such a way that we will still cover all the bills and have around £450.00 per month spare. We live in a nice home and have a great life. I’m positive that by looking to the long-term we’ll get through this in a much better position than we started.
However I’m not going to lie. I am slightly terrified.
In 2008 the Labour government gave private landlords a gift that would allow them to stop maintaining their properties are have a guaranteed income based not on the quality of their properties but the size.
In the local authority where I worked prior to Local Housing Allowance there was a wide variation of rents. The good properties went for good amounts and the dross was a good 20 to 30% cheaper. Slum landlords got the absolute minimum.
However with the arrival of Local Housing Allowance meant that slum landlords could increase their rents in line with the figures provided. In my authority a 2 bedrom flat would guarantee the landlord an income of £650.00 per month regardless of its quality.
If their tenants complained then the landlord would simply issue them with a 2 months notice to quit safe int the knowledge that there was no shortfall of desperate tenants who would move in no matter the quality of the accommodation.
The quality of private rental accommodation in the area I live is shocking and has declined sharply following the introduction of Local housing Allowance as the need to maintain properties for vulnerable tenants has all but disappeared.
I have been reading through landlords comments on message boards and twitter and it is clear that some are terrified of the implications of Universal Credit. What makes their comments interesting is that their fears are much the same as their tenants. The fear of the unknown. With Local Housing Allowance you know what you can charge in rent however with Universal Credit the Housing element is unknown in many areas.
For any landlords worried about the effect of their tenants being paid directly they would do well to make sure that their properties are of a high standard. I know of a slum landlord who had let his properties become completely run down and had the management of them taken over by the local council (after they had issued him with a hefty fine).
They appointed a managing agent to look after the properties on the agreement that his many tenants Local Housing Allowance was paid to the agent and no money was to be transferred to the landlord until all maintenance issues were sorted. The effect of this change 24 months on is that for these manged properties there are NO RENT ARREARS and the Victorian properties he has converted to H.M.O’s are now looking absolutely beautiful.
The landlord is still receiving a 5 figure payment each month for housing vulnerable tenants. The profit will always be there for providing homes that local authorities can no longer offer. In my opinion however it will be the landlords who manage and maintain their properties well who will profit the most under Universal Credit.
So will Universal Credit lead to an improvement in private rental accommodation? I would argue that by placing power in the hands of the customers then the answer is yes.
1) Sent off claim for P.P.I reclaiming.
I received a letter from MBNA yesterday advising me that I had taken out a P.P.I policy with a credit card during a period that they had been found guilty of widespread misselling. I do not remember taking out P.P.I but did have a policy called “lifestyle protect”. After a bit of googling I found out that this was a fluffier wording for P.P.I but basically amounted to the same thing.
During the time I took out the policy I was suffering from panic attacks and remember the person who sold me the policy being quite pushy during the phone call. If they decide I was misold the poloicy I should receive a refund and this will be put against the mortage.
2) Found some items to flog on ebay:
If they haven’t been used for a year on they go. There is a playmobill station, antique bottle and sat nav going on later tonight.
3) Searched draws and cupboards for money.
I wan’t to hopeful of this yielding anything but through coat pockets, birthday cards and old wallets i managed to find £110.00. Amazing luck. That’s this weeks food shop sorted.
Benefits are only claimed by the poor…this is nonsense.
If you work hard you do not need to claim benefits…this is nonsense.
I work for a local authority earning £22,500 per year. This is just shy of the “magic number” set by Ian Duncan Smith of £25,000.00. So by logical reasoning you would expect that I as a hardworking man do not receive any benefits. This is not true. I receive a lot and as I work I am not effected by the benefit cap.
I take home £1350.00 per month
My Local Housing allowance
I receive £400.00 per month
My child benefit
I receive £240.00 per month
My child tax credits
I receive £780 every 4 weeks (£845 per month)
Rent from rental property minus costs
£227.00 per month
So in total my income is £1350 from my wages, £2724.00 from the property but supplemented by £1485.00 in benefits. This gives me a total of £36744.00 per year. This is over £11000.00 higher then the benefit cap.
My situation is not unusual as a working man with a large family. However as I am more likely to vote, post on mumsnet and other sites the government takes notice of I am not deemed as a sponger.
The middle classes and the over 60’s take more from the government than the unemployed. I am not afraid to admit this but it is vital that is shared. If you are affected by the benefit cap share my story to show these cuts for the tax on the poor to supliment the rich and middle classes that they are.