Renting to Young People and Teenage Mothers

Latest landlord News by: Madalena Penny

Unemployment figures released yesterday reveal that there are now 2.48 million people unemployed.  One in five young people are without work, with a rise in unemployment for 16-25 year-olds increasing by 12,000 on the quarter.  Unemployment affecting 16-17 year-olds has also reached an all time high leading to 218,000 youngsters now jobless.

Out of these figures, it is estimated that approximately, 49,000-56,000 babies are born each year to teenage mothers, the highest rate in Europe.  While dejected first-time buyers unable to raise deposits bolster tenant demand, residential landlords in the private rented sector are spoilt for choice and can basically handpick the best tenants for their properties.

Renting properties to teenage mums, whom the majority are in receipt of housing benefit, can sometimes be a gamble for landlords, with young people and young mums placed in lower end properties in less affluent areas.  Likewise, any young person in receipt of housing benefit faces major problems now when seeking to be housed.

The increased age threshold for single people being raised to 35 year olds has been condemned by welfare groups and concern for young people is growing.  There is also increased chance that people in abusive relationships or who suffer from domestic violence will be forced to ‘stay put’ as long-term affordable and appropriate housing will be unobtainable, and single room accommodation the only choice for some.

Sim Sekhon, senior partner at landlord network, Legal 4 Landlords said: “ It is difficult to apply tenant referencing on under 25’s and teenage mums as they have not built up a proper credit, work or previous accommodation history.

‘There is always the worry that housing benefit paid direct to tenants does not get passed onto landlords.  Teenage mothers with little experience or responsibility in financial matters may fail to meet their rental obligations.

‘We would advise landlords to employ a rent guarantor.  Many rent guarantee insurance schemes will not accept cover on tenants without a correct tenant referencing system, the guarantor referencing is one way around this.”

With 30th percentile rent rates, introduced this month on new tenants in receipt of housing benefit, local authorities have been given the power to pay landlords the rent directly if they lower the rent in accordance with the 30th percentile rate.  As from now, landlords offering tenancies to people in receipt of LHA, can approach their local authority and ask them to have the rent paid directly to them rather than the tenant.