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Housing Benefit

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  • Housing Benefit

    Apologies if this post should instead be in the Property section.

    I run two HMOs. All my tenants are Universal Credit claimants, and they pay me their rent from their benefits. All my tenants are referred to me from the local council as emergencies (they are homeless). Most tend to use my HMOs as a stepping stone to rebuilding their lives and move on. Staying on a more long-term basis is of course possible too, if needed.

    As my tenants are, sadly, people with chaotic backgrounds — all have/had drug abuse problems, some mental health issues, some alcohol problems — I provide additional support and supervision to these tenants where necessary. This supervision/support varies according to need: benefits advice, important form-filling, information on food banks/parcels, resolving tension within households, etc. To give concrete examples, in the past few months I have had to: evict somebody for drug-dealing from the house; call the police on a violent tenant who assaulted other residents and disturbed the neighbours' peace; call 999 twice for a resident threatening/attempting suicide; calm down a tenant who was having a breakdown due to her past. This is not your usual "hands-off landlord" scenario — I check in on the residents at least twice a week; this week, for various reasons, I have been every day.

    I was told by a benefits advisor that the nature of this housing was such that it was "exempt" or "specified" accommodation, and as such the residents would be eligible to apply for the old-style Housing Benefit (which would be paid directly to me) as opposed to the housing element of Universal Credit. This was confirmed by another employee of the council. I would prefer this as rent arrears are a significant problem — the residents struggle to budget, are too tempted to spend the money on their pay day, and/or have to be chased up to pay rent.

    I was then e-mailed the following week by another benefits advisor from the council to say that I had been misinformed. According to this e-mail, Schedule 3 paragraph 4(1)(b) and (10) of the Housing Benefit (consequential provisions) regulations 2006 SI no 217 require that a dwelling, in order to be "exempt", must satisfy the "landlord condition" and the "support condition". As I do not meet the "landlord condition" (i.e. of being a housing association, a registered charity, or a voluntary organization), my houses cannot be "exempt" (and therefore scrutiny of whether the "support condition" is met is unnecessary).

    I have been advised by third-party consultants in the supported housing sector that I could and should set up a registered charity through which to provide the services I already provide at present. I am happy to do this. I know of existing, bigger charities in my area that run the same sort of housing and are far more hands-off than I am, the support and supervision amounting to little more than a weekly visit for an informal chat.

    My questions are as follows:

    1. While the council explained the definition of exempt accommodation insofar as care, support, and supervision is provided, they did not respond at all to my question about emergency accommodation (which also falls into the category of accommodation for which new claims of Housing Benefit can be made). I assume that emergency accommodation is treated differently, as far as the law goes, from supported accommodation. For instance, hotels also house homeless persons by referral from the council in exactly the same way I do. The costs are covered by Housing Benefit. Why do hotels qualify but I don't? Hotels and private landlords offering this service are both for-profit.

    2. Regarding supported accommodation, how do I differentiate between 'support' and 'housing management'? I was advised that this distinction can be crucial as housing management costs can be claimed back through the Housing Benefit scheme. How would it be best to log, record, or prove support provided and housing management services rendered?

    3. What rent, roughly, could I charge per tenant in the event that it is classed as exempt accommodation given that the Local Housing Allowance/benefit caps do not apply to this nature of accommodation for which HB applies?

    Apologies for the length of this post, and I hope it is all clear.

    Huge thanks in advance.
    Tags: None

  • #2
    Have you spoken to Shelter? They are specialists in this area. Also, speak to local housing charities.
    You do know that once a tenant on UC has six weeks arrears the Landlord can arrange for the rent to paid directly to them.


    • #3
      I have not spoken yet to Shelter but I think I will tomorrow. I thought about contacting other housing charities but I wondered whether they would regard this as me ‘poaching’ their potential pool of residents and be reluctant to tell me anything. I guess I have nothing to lose by giving it a go.

      I made three applications for direct payments to UC about six weeks ago and haven't heard a thing back from them. I am not in a position to afford to wait that long, as several months I am either breaking even or running at a loss, hence my concerns about long-term viability.

      Some of my tenants previously lived in the same sort of accommodation as mine but run by charities, and I gather that they were charged a small fortune. My most recent tenant was living in supported housing in which all five residents were paying £1,300 per month, the bulk of which was covered by HB with a smaller top-up paid by the residents.

      This is far, far more than I am able to charge at present (which I never get in full anyway due to non-payments) and an income comparable to that would enable me to pay myself well as a charity employee as well as bringing in another support worker, a repairman, and possibly a cleaner on the books.

      I'm still curious about the council's non-answer to my separate point about emergency housing, though.


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