Not renting to tenants on benefits is short-sighted and self-defeating

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A North East property boss has described himself as “shocked” by one of Britain’s best known landlord’s decision to evict 200 tenants simply for being on benefits – calling the decision “short-sighted and self-defeating.”

Fergus Wilson – who owns nearly 1000 properties in Kent with his wife Judith –hit the headlines this week for issuing eviction notices to every tenant who receives welfare, and has announced that he will no longer accept applicants on housing benefit.

 Research last year by the National Landlords' Association suggested that landlords are becoming increasingly reluctant to rent homes to people who receive benefits, with just one in five willing to do so.

 Many cited the government’s Universal Credit reforms as the main reason for closing their doors to social tenants.

Under the scheme, six benefits, including housing benefit, will be combined into one monthly payment – with tenants paying their rent direct to their landlords.

Under the current system, landlords with tenants relying on Housing Benefit to pay the rent can receive the payment directly.

Ajay Jagota of North East lettings business KIS Lettings – named Letting Agent of the Year at the national Landlord and Lettings Awards – believes Wilson has made the wrong decision.

Ajay, who manages properties for 700 landlords from branches in North Shields, South Shields, Sunderland and Welwyn Garden City, said:

“I’m shocked that as experienced and successful operator as Fergus Wilson would take such a short-sighted and self-defeating decision.

“Depriving yourself of tenants in such an arbitrary way doesn’t make much business sense to me - it seems so much more sensible to assess every tenant on their own individual circumstances.

 “What happens next? Not accepting tenants who you think might end up on benefits at a later date? What about people who go onto benefits after they’ve moved in? All it takes is ill-health, relationship breakdown, bereavement or a few bad decisions from their boss and all of a sudden your most reliable tenant is in arrears.

 “What about pensioners? That’s a welfare payment. Or a couple with two well-paid jobs on child benefit? Are they all of a sudden a risky bet?

 “As a letting agent KIS is always looking to make sure our landlords aren’t left out of pocket by rent arrears or anything else – that’s why we abolished deposits and replaced them with asking new tenants to nominate a guarantor for their rent and created a unique landlord insurance policy. That way our landlords are covered no matter what happens.

“Being a landlord is a business, but if you or your letting agent has the skills to manage tenancies effectively you can minimise the risk of arrears whatever the circumstances”.