Tenants on housing benefits are likely to lose out on rental properties as landlords shun them in order to offset the impact of last year’s Budget.
According to the latest research from the National Landlords Association (NLA) 60 per cent of landlords report that the Chancellor’s decision to remove mortgage interest relief from 2017 will reduce their profitability. In order to minimize the impact of the change, 20 per cent explained that they would need to prioritise letting to tenant types other than those on benefits as the latter are believed to be ‘risky’.
Over the past four years, the proportion of landlords letting to tenants on housing benefits has nearly halved, a trend that is expected to increase.
Tenants on housing benefit are often viewed as ‘riskier’ due to high incidences of missing rental payments, partly caused in part by the widening gap between market rents and the amount of benefit available to claimants. Over the last year, 64 per cent of landlords with tenants in receipt of housing benefit experienced rent arrears.
Furthermore, over the past four years, the proportion of landlords who let to tenants in receipt of housing benefit has almost halved, with the trend looking certain to continue.
Chief Executive Officer at the NLA, Richard Lambert, said: ‘The private rented sector (PRS) has undergone considerable growth and improvement over the last decade and it needs to continue to do so in order to meet the needs of a growing, broader-based renter population. Many of those who once would have expected to live in social housing now have to compete for private homes with other types of tenants.
‘It’s a real concern because a significant proportion of landlords already choose not to let to tenants who receive benefits because the perception is they are too risky. Rightly or wrongly, young professionals or working families are seen as more likely to be better payers and less hassle to manage. The removal of mortgage interest relief from 2017, combined with the government’s benefits freeze and the reducing availability of social housing, will create a perfect storm whereby some tenants will struggle to find any sort of housing at all.’
Click here to view the original article “Landlords Avoiding Housing Benefit Tenants”
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