Many landlords insist on ‘no DSS’, however people in receipt of housing benefit can make good tenants. Besides, why keep a property empty waiting for a suitable tenant when there are lots of people on benefits looking for housing? This article will look at how you can find tenants in receipt of housing benefit.
First, a note on terminology – the term DSS is derived from the former Department of Health and Social Security, which dealt with benefits. They are now dealt with by the Department for Work and Pensions (DWP), however the label ‘DSS’ for tenants on housing benefit has remained in common parlance, so will be used in this article for consistency.
Why choose a DSS Tenant?
Landlords often dismiss DSS tenants as they are considered risky both financially and in terms of caring for the property. Another reason is the complexity of the housing benefit system and the potential this creates for payment delays.
However, there are some significant reasons to consider DSS tenants. A lack of social housing and the effects of the ‘bedroom tax’ have created a high demand for private sector housing from DSS tenants. And as already mentioned, few landlords are willing to take them on, so competition is low. This means that you are able to cherry pick the best candidates if you are willing to open up your properties to DSS tenants.
Also, DSS tenants are often more practical and less picky in their property requirements, so there’s no need for a high-finish interior – as long as everything is working and presentable, this will probably be enough. However it is important you maintain the property to an acceptable standard, as a poorly maintained house is unlikely to attract the best tenants even when you are targeting DSS tenants.
And of course, while DSS tenants have a bad reputation, in most cases they are good people who have fallen on hard times – which, in the current climate, can happen to anyone. Single parents, ex-military and people approaching retirement age are particularly good options when it comes to finding a decent tenant.
How do I find DSS Tenants?
To find suitable tenants on housing benefit, it’s worth contacting the housing or benefits office of the local council as they may be able to put you in touch with potential tenants.
Another option is online advertising – you can advertise for free on Gumtree, which is particularly popular with DSS tenants, or pay a small fee to an online estate agent to have your property listed on Rightmove and Zoopla. There are also specific websites for DSS rentals, such as Lets Help You and DSS Move. Make sure your advert is clear that you accept DSS applicants, and state the rental price in DSS terms – for instance, “£475 per calendar month or 2-bedroom rate for housing benefit.”
When you get some interest (and this shouldn’t take long), vet your potential tenants to find the best candidate. As mentioned before, more mature tenants are a good option. Bear in mind that if a tenant is likely to be flitting between housing benefit and short periods of work this could end up with delays in housing benefit payments as they reapply, so although it seems counter-intuitive, long-term benefits claimants are probably a safer investment. Consider asking for a small signing fee or a guarantor – this gives you extra security and also helps you to find the most serious and organised candidates.
Once you have found the right tenant, you should carry out thorough background checks, obtain references and make sure that your tenancy agreement is sound. It would also be wise to get rent insurance to protect yourself in case of future problems.
N.B. Some buy-to-let mortgages include conditions which forbid you from renting your property to DSS tenants, so before you do any of the above make sure you’ve read the fine print and that your mortgage provider is happy to proceed.
While perhaps a less obviously desirable source of potential tenants, DSS tenants can prove to be reliable and conscientious – and with such high demand, you can be as choosy as you like to find the best match for you and your property.