The case of a letting agency which has sent Section 21 notices to all of its tenants was raised in Parliament yesterday.
During Prime Minister’s Questions, Labour leader Jeremy Corbyn said that GAP Property had sent letters giving every single one of its tenants two months’ notice, ahead of the roll-out of Universal Credit in its area. The large majority of GAP’s tenants are said to be on UC.
The letter, sent to 350 properties, was brandished by Corbyn during heated exchanges with Theresa May.
Corbyn said: “The agency is issuing all its tenants with a pre-emptive notice of eviction because Universal Credit has driven up arrears where it’s been rolled out.
“The letter – and I quote – says GAP Property cannot sustain arrears at the potential levels Universal Credit could create.”
He asked: “Does the Prime Minister think it’s right to put thousands of families, through Christmas, under the trauma of knowing they are about to be evicted because of Universal Credit?”
GAP’s letter to its tenants ended: “This is an extraordinary event that requires both you and us to take extraordinary measures.”
Corbyn told the Commons: “I suspect it is not the only letting agency sending out that kind of letter.”
Corbyn asked May to pause the roll-out of UC.
He said: “Blanket notices of eviction handed to tenants because of Universal Credit are totally unacceptable, should shock us all and bring shame on this Conservative Government.
“Ministers have been told over and over again that the roll-out of their flagship social security policy is causing debt, hardship and homelessness, and this is further proof of the devastating impact it is having.
“The Tories must immediately pause the roll-out and fix these problems that are turning people’s lives upside down.”
Shadow housing secretary John Healey said: “This letter shows that the Government’s Universal Credit chaos is leading directly to threats of eviction.
“People on ordinary incomes, both in and out of work, are paying the price for ministers’ ideology and incompetence.
“The actions of the letting agent are shocking, but the buck stops with ministers.
“During seven years of failure on housing, this Government has ignored renters with no protection against poor standards, no control of rising rents and no action on constant insecurity.
“Ministers must pause Universal Credit and fix the problems, and act on Labour’s plans to give renters the consumer rights they deserve.”
May said she accepted that concerns had been raised about UC, but she insisted: “What we see is that after four months, the number of tenants on Universal Credit in arrears has fallen by a third.”
She asked Corbyn to pass on the letter to her.
GAP Property director Guy Piggott said it was “great” that Corbyn had raised the issue.
Universal Credit is due to be rolled out in north-east Lincolnshire on December 13.
Why aren’t pensioners on that list? They receive money from the government in exactly the same way all the other ‘assisted’ tenants do.
That action by that agents shows a thorough lack of understanding of the opportunity offered by universal credit.
I have in the past attempted to explain the social and commercial benefits of the 12 payment monthly system over a 13-12, 4 weekly system to people like Clive Betts M.P.. The complication of double entry client cash accounting and the seemingly disjointed sawtooth arrears of 13-12 make it difficult for our elected MPs to comprehend, so the general public stand no chance. (roll eyes)
Irrespective of the politics of universal credit, which is the underlying motivation for all the kerfuffle that surrounds the scheme, if I were to go back into lettings and management I would deal with as many universal credit tenants as I could get my hands on; The naivety of agents like this mean it’s an uncontested market that’s as large as the whole of PRS (if you know what you’re doing and how to do it) Last time I did the numbers I identified yields of 8-11%, capital growth of as much as 23% and conservative (small c) incomes of approaching £1b for landlords, £100m for agents. As the fees ban impacts letting agencies it’s time for the smart people to start listening.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Pension benefits are not part of UC and I (along with the rest of the town’s PRS) don’t house many pensioners. I specialise in HB and will likely continue to be the country’s second largest private rental housing provider to benefit recipients once UC is fully in place. So far I have had no issues…not a single eviction, but that is because my tenants are placing a priority on their rent (something that seemed to escape them prior to my stiff letter).
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Retro politician Mr Corbyn says “During seven years of failure on housing, this Government has ignored renters with no protection against poor standards, no control of rising rents and no action on constant insecurity.”
He wants to take the rental market back to the 1970’s when you could not rent as landlords withdrew from the market as a result of the introduction of rent control and giving security of tenure to tenants. Rents were controlled by council rent officers – I can recall around 1980 a 4 story period housing in a prime Greenwich (fashionable London) location being on a controlled rent of about £12.00 per week. A typical roof repair at the time would have been about £50-£60. Landlords who had not evicted their tenants before the disastrous Rent Act were in fact providing accommodation at their own costs in many cases as rents would not even cover repairing the properties. Standards of accommodation were appalling as rents did not even repair property to a half decent standard. If you rent then Mr Corbyn’s policies sound appealing until of course you find you can’t rent as landlords sell their investments! Our young voters should look at housing history when deciding what they wish for!
This letter from GAP shows the level of desperation from an agent who currently accepts benefits tenants. Many agents and landlords have already got out of this sector of the market as dealing with the DWP/council is difficult/impossible. ASK YOURSELF why would any agent or landlord want empty property – that does not produce a return on investment!
Government have caused the problems with asset stripping social housing and then blame everyone else for their bad policies.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Maybe it will mean they sell off their porfolios increasing housing stock so people can afford to buy rather than being forced to rent
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Maybe they will but the poor people who are currently renting will then end up on the street – no easy solution.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I am GAP Property…hello. No, I operate in Grimsby. House prices start at maybe £15k, but I regularly buy decent 3-beds at £40-50k. The problem with such a poor town is tenants either don’t have the deposit (nor the means to save for one), or their credit rating is not sufficient enough for the banks to lend to them. This is the exact reason much of the town is rented.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Robert, perhaps you could explain how not giving people on UC no money for 6 weeks and then not be willing to pay (some of) it direct to an agent or landlord when the recipient requests it helps either party. I am not making a political comment and I am genuinely interested as we have a number of tenants on UC and believe me they are struggling.
Luckily our local Council has a ‘discretionary fund’ to help out with arrears but it is causing a lot of stress.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I am not saying they aren’t struggling for money I am saying that universal credit rationalises the process to one that everyone can understand. It’s only when the problem is understood can the problem be solved
Ask Ros to pass your details to me and I will call you to explain how UC is an opportunity for the traditional property management firms to help with the housing crisis.
I am not interested in the politics of housing I have said that housing should be an apolitical department that runs outside party politics.
There needs to be a rationalisation of process and it’s the impact on the civil service that I suspect is behind the stubborn resistance to get this sorted out as quickly and easily as the logical solution allows.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Well, agents don’t have tenants and cannot take the initiative to serve notice on their principal’s tenants, nor do they sustain any arrears.
On the other hand, the letter attached to this article seems like a good practice as it makes very clear to tenants what is going to happen re. universal credits and what they need to do re. their rent payments.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Good point Romain – pity that Corbyn put the emphsiais on the agent serving the notices. Maybe he isn’t aware that most agents actually take instructions from landlords. Helps to cement agents near the top of the list of the most hated professions I suppose ….oh, still behind politicians of course!
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Benefit entitlement and UC has been a disaster in my area taking in most cases over 3 months to get benefit payments. That is a long time for a landlord to not receive rent, many face hardship where there are financial obligations to be met.
We have being using Sec 21 notices on this subject when it is unsustainable for the landlord not to be receiving rent, particularly when we are not given any date for the future when the payments will be received. HOWEVER our notices make it perfectly clear that it will be withdrawn, IF the rent arrears are paid up (benefit is received) before the end of the Sec 21 notice period, which if not received would take the problem of no rent to 5 or 6 months!
In these instances we always sit down and speak to the tenants. ALL agree it is not fair on their landlord and suggest they complain formally and show the Sec 21 Notice and why it has been issued to the benefit officer without delay. They immediately get emergency funding and because it of such a high amount, it is paid directly to us, never to the tenant. The Sec 21 notice is immediately withdrawn. Managing the situation is the answer, not sitting back and letting it get very messy for all. Be warned, do your own homework on entitlement to the benefit!
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Regrettably UC will cause hardship. And for the individuals and families truly entitled and in need of it, my heart goes out to them.
But if people on UC feel that they do not like the insecurity of being on UC – Will it encourage some to find gainful employment and not become career benefit recipients?
Too many individuals are too comfortable having a life on benefits when they could be working and choose not too.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Tell that to the chronically ill and the disabled. Like landlord bashing and agent bashing the benefit receipients have generally been undergoing the same for treatment for longer.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
It’s certainly relevant to where you are, in our borough the social housing tenants need to top on their rent often by a couple of £100’s in order to meet the private rent rate, where as previous years there was profit in it for landlords. Now there is a “cleansing” taking place so the “poor” are being pushed out. in the past 5 years rents and asking prices on sale properties have almost doubled due to the Elizabeth line coming into our area. Truthfully the government selling off the property it owned was the start of the mess, they have managed to allow growth to happen so vastly across the U.K that poor pockets have become bigger and they have no property of their own to fulfil the requirements and then private landlord do not wish to suffer a loss and take a risk with a council tenant because they are so protected. No one would choose to be paid in arrears and then also have to go through a costly eviction process because the council cant help when an individual wants their property back. Also why are agents being blamed when it’s their system that caused this disaster for LANDLORDS
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Because politicians are politicians and can’t be trusted.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Maybe they are just using it as an excuse to churn their tenants while they can still earn tenant fees?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
No. Thus far we’ve not had to evict anyone due to UC. Those that are in receipt were made fully aware to make their rent a priority (which is not normally the case and something that we can stomach if needed, just not en-masse). Without my stiff letter, I’d have a mess on my hands. I am very aware of the market in which I operate and my clientele. I am in one of the poorest pockets of the country.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
The use of inflammatory terms such as ‘evicted’ is propaganda
a section 21 is a notice to quit
not an eviction
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
And what will the politicians cry next year when the Section 13 notices go out to help mitigate the fee ban?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register