Landlords Avoiding Benefit Tenants

There has been a general slump in the number of private landlords in the UK who are willing to take applications from people on benefits and local authorities are being warned that they need to take action.

As previously reported, http://blog.legal4landlords.com/welfare-reform-is-bad-news-for-landlords-and-tenants , there is now a significant fall in the number of landlords even willing to consider benefit tenants

Councils say that the number of private rental sector (PRS) landlords who will take tenants claiming benefit has fallen by over 20% during the last year. The reason behind the reluctance is the proposed scrapping of the Local Housing Allowance (LHA) payments that will be replaced by Universal Credit payments made directly to tenants under the Government’s welfare reforms.

As a result, some local authorities are being forced to accommodate homeless people claiming benefit in temporary bed and breakfast accommodation due to a lack of available social housing stock.

Latest figures show that some local authorities are housing nearly 900 families with children for longer than the six-week period set out in Government guidelines.

Currently, many private landlords across the UK don’t want to rent to tenants on benefits because of the strong rental demand from prospective tenants who are already employed.

Landlords are able to complete comprehensive tenant referencing on working applicants and can take positive action, such as Rent Guarantee Insurance, to ensure a regular rental income.

Overall, landlord reluctance to house tenants claiming any form of state benefit leaves all local authorities in a very weak position when attempting to negotiate PRS rents down within their regions.

Government and local authorities have been urged by homeless charities to take immediate action to ensure a continued supply of good-quality, affordable properties in the private rented sector that will be available for qualifying tenants claiming benefits.

Discussions between local authorities and the Department for Communities and Local Government (CLG) have already taken place about necessary action needed to bring private rented sector landlords back to the social housing market including the introduction of tax relief for landlords who are willing to participate.