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Housing Benefit tenancies in detail:

We find Housing Benefit recipients can make excellent tenants. We have similar requirements to private sector tenants but there obviously there are some differences. These are the differences:

• Suitable home-owning guarantor will be required
  
• Employer reference not required from tenants who do not work
  
• For tenants without a security deposit, acceptance onto the local council Deposit Guarantee Scheme or Rent Bond Scheme
  
• No tenancy application or assessment fees charged
  

One point to highlight is that we still require Housing Benefit tenants to pay their rent monthly in advance, from their own bank account, in the same way as private sector tenants. This is done by tenants having their Housing Benefit paid to them instead of directly to the landlord. We require this because it means we are no longer involved when benefit entitlements/payments change, and sometimes saves us considerable management time. Unfortunately that can also rule out many housing benefit recipients because Housing Benefit is paid monthly in arrears. It means our tenants have to make one monthly rent payment from their own resources at the start of the tenancy. We require this because our tenants then have a personal financial stake in the tenancy. (When rent is paid in arrears by the council, and no security deposit is lodged, a tenant has no financial stake in their tenancy at all.)

A Guarantor is a person (or people) who legally guarantees the tenant will meet their obligations under the Tenancy Agreement. They will sign a legal document binding them to paying the rent should the tenant fail to do so for any reason whatsoever, and to fulfilling any other financial commitment the tenant has under the Tenancy Agreement. 

Consequently, the guarantor need to be capable of fulfilling this commitment themselves, which is why we require them to be home-owners. Speaking bluntly, home owners are far less able and far less likely to disappear should the landlord ever need to sue them to recover money owed by the tenant. For this reason we expect to meet the proposed guarantor, at their home address, to make sure they appreciate their obligations (and to allow them to assess US as reasonable landlords). 

We will also carry out a search with the Land Registry to confirm they are owners of their home address. (The existence of a mortgage, if any, is not significant.)