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Luke P
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Luke's Recent Activity

Luke P

From: Luke P 12 September 2019 14:21 PM

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From: Luke P 05 September 2019 13:47 PM

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From: Luke P 19 June 2019 09:47 AM

Luke P
@Paul Barrett, some of the reasons why it often does not make sense to accept people on benefits as tenants: 1). Tenants on benefits often cannot afford the rent. This is partly because benefits have been capped and have not kept pace with market rents. Housing benefit on average only covers 57% of the cost of a private rental. What I want to know is: why would a person agree to rent a home to someone who so clearly cannot afford to rent it? 2). The housing element of benefits, including in the new Universal Credit system, is paid in arrears, and landlords need the money in advance as that is when they pay their mortgages. Working tenants pay in advance and are therefore able to meet the terms of the tenancy agreement. 3). If for some reason the tenant does not make the benefits claim in the right way, on time or at all, or if they do not turn up for an appointment, lie or make a mistake in reporting on any work they’ve done for example, the benefit can be stopped. The landlord then does not receive the rent because of something the tenant did or didn’t do. Large amounts of arrears can accrue in this way, which the landlord will not get back. 4). If it is discovered that the tenant in some way claimed fraudulently, the authorities have been known to threaten the landlord and/or ‘clawback’ the money by not paying the rental element for another claimant the landlord is housing. A landlord was recently threatened with having to pay back 4 years of the housing element paid to him, because of a fraud by the tenant. What landlord wants to face this prospect, when they can simply house people in work? 5). If a tenant does not pay the rent and is evicted owing a lot of arrears and/or having caused damage to the house and the landlord has incurred legal and court fees, with a working tenant they can apply for an attachment of earnings and eventually the debt can be repaid to them. With a tenant on benefits there is no employer on which to apply an attachment. There is therefore no way the landlord can ever recover the debt. 6). If a tenant is on benefits and/or on low wages, they may struggle to heat the house. Without proper heating and ventilation, the house may fall into disrepair. If the Environmental Health Officer then calls around, they will most likely blame the landlord for the disrepair. So the landlord’s home is adversely affected and they then face possible fines. 7). People on benefits naturally spend more time at home. This increases wear and tear on the property. 8). Often insurance companies and lenders specify that they will not accept tenants on benefits. In such circumstances, if the house burnt down for instance, the landlord’s insurance would be invalid. In terms of contravening the lender’s requirements, the landlord could face the liquidators being called in if the lender finds they have contravened the terms of the mortgage. The landlord could face a demand to immediately pay back the capital; this will usually be impossible. The landlord in this situation would face huge losses, purely because they had accepted as a tenant someone on benefits. 9). Because of the Government’s fiscal attack on private landlords – most outrageously and absurdly in Section 24 of the Finance (no.2) Act 2015, which means landlords now cannot offset the finance costs of their businesses before calculating profit – it is imperative that landlords select the tenants with the greatest means and get the rents as high as they can go. This is not for the landlords’ benefit, but rather to pay the huge new tax liability, which can exceed 100% of actual profit. This is explained in a briefing paper I wrote for the Institute of Economic Affairs with the economist and professor Philip Booth. Taxation without justification — Institute of Economic Affairs 10). Also, if Section 21 is scrapped, landlords face tenants being granted lifetime tenancies. If this is the case, then landlords will want the best possible tenants to occupy their properties – ones who have no problem paying the higher rents forced on the sector by the Treasury and ones who, as mentioned, can afford to look after the house properly. This will greatly restrict the options for those on benefits. As the economist Ryan Bourne has stated: “The results of this policy are therefore obvious to anyone who understands basic economics. First, landlords will be far less likely to rent to tenants they consider high-risk. The incentive to engage in serious vetting, demanding extensive guarantees from tenants, will skyrocket.

From: Luke P 12 June 2019 12:40 PM

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From: Luke P 31 January 2019 12:06 PM

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From: Luke P 18 June 2018 11:56 AM

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From: Luke P 16 March 2017 10:31 AM

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From: Luke P 15 February 2017 13:29 PM

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From: Luke P 23 November 2016 10:35 AM

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From: Luke P 26 October 2016 09:46 AM

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From: Luke P 26 October 2016 09:22 AM

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From: Luke P 10 October 2016 10:50 AM

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From: Luke P 06 October 2016 15:01 PM

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From: Luke P 10 August 2016 08:14 AM

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From: Luke P 09 May 2016 14:05 PM

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From: Luke P 21 December 2015 08:28 AM

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From: Luke P 25 November 2015 14:34 PM

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From: Luke P 08 October 2015 09:05 AM

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