Letting to a family on housing benefit - pros and cons
I'm a new, inexperienced landlord renting my 3 bedroom house out so I can live in London. To cut a long story short have ended up offering it to a nice Polish family: The husband is the only one in employment, the children are 11 & 14. After provisionally accepting the house, it then became clear that The family are accepting housing benefit on top of his salary as well as child tax credit and child benefit. The husband is also happy to admit that he is doing various bits of construction work on the side for cash.
No AST agreement has been signed yet and he is happy for me to get references from previous landlords, his bank manager and to run a credit check first, as well as paying in full at the start of each month etc. So far, he's been very helpful providing info etc.
The house is renting for £850 pcm not including council tax and bills, his monthly income (with housing benefit but without child tax credits and benefit) is £1458, plus approx £500 pcm cash on the side. Looking at 4 months of his latest bank statements, he has not been overdrawn in this time.
1. Am I mad to be doing this??
2. He says that housing benefit will increase if they move here because their current flat is too small with the family growing up and this house is a more suitable size - is this true?
3. Does the fact that children will be living here make it more difficult to evict the family if they become unable to pay the rent? (obviously I would hate for this to happen, and do not want it to get anywhere near that stage in the first place)
4. Is it better to get payment directly from him every month or from HB?
Sorry about the long and convoluted essay, I'm in a little bit of a hurry to get it all sorted and move ASAP, so am very grateful for any advice...
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