KEN HOUSTON on the crazy system of government-funded residential rentals that is turning the market on its head.
One of the better documentary/lifestyle series broadcast recently on Channel 4 (i.e. not one riddled with PC, left-wing bias) was Britain’s Benefit Tenants.
This, as the title implies, focussed on people whose rents are paid for by the DWP, the landlords who accommodate them and the agents responsible for arranging each tenancy (as well as dealing with subsequent problems, of which there seemed to be many).
In one of the towns where filming took place, it was revealed that rental charges to tenants on benefits are approximately one-third greater than those charged to ‘conventional’ renters – i.e. those in regular employment who pay out of their own pockets.
This shows just how crazy our housing benefit system has become but there is actually a method behind this madness. With no capital assets, no money for a deposit and (in some cases) disruptive lifestyles, the premier charge on rent is deemed necessary to cover the additional risk.
And what a risk – the whole series reported a high incidence of unpaid rents and damage to property, although it would appear that some of the affected landlords had been rather naïve, e.g. Londoners making purchases in the North of England, having not viewed the property and knowing nothing of the location.
The problem has been compounded by an earlier government decision not to pay rents directly to landlords but to the tenants themselves. The result – as one might have expected – led in many cases to huge arrears as the more dysfunctional of the tenants spent the rent money on other things, beer and fags being among the most popular.
This change of government policy brought a lot of bleating from landlords which from their point of view was understandable but is rather less so from the stance of the taxpayer (who ultimately funds these rentals).
As it says on the tin, any investment carries a risk and property is not – nor should it be – an exception. As things stand, benefit landlords are still having their rental incomes paid for out of public funds so it’s a bit of cheek to expect the taxpayer to absolutely guarantee these incomes by paying rent directly to their bank accounts.
As for the other bleat -that the properties have hardly risen in value, and in some cases have actually gone down – tough.
Perhaps they should have done their homework instead of readily swallowing the sales talk about guaranteed rental income and steadily rising capital values.
Regarding the root of this problem, many of the individuals taking part appeared to have been in regular employment at one time but instead of housing benefit providing a short-term safety net when their lives took a turn for the worse, they had since become conditioned to the benefits lifestyle.
During the election campaign, politicians made a lot of noise about ‘making work pay’ (as opposed to living on benefits). Clearly what is needed is more action and fewer words.
KEN HOUSTON says the crazy system of government-funded residential rentals is turning the market on its head