Landlords urged not to dismiss tenants on housing benefit

According to the poll of 1500 landlords, more landlords are turning away housing benefit claimants than ever before with almost six in 10 landlords (57%) refusing to accept anyone on benefits.

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Landlord Assist, the nationwide landlord services firm, is warning landlords not to overlook and totally dismiss tenants who are in receipt of housing benefit payments.

Their comments come following a recent report from Spareroom.co.uk which revealed that just 18% of landlords currently had tenants on housing benefit in one or more of their properties. In a similar survey that was carried out two years ago this figure was almost a third.

According to the poll of 1500 landlords, more landlords are turning away housing benefit claimants than ever before with almost six in 10 landlords (57%) refusing to accept anyone on benefits.

An even more worrying revelation from the poll was that, of those landlords who do currently let to people receiving benefits, more than half said they would refuse to take any more social tenants on after the roll-out of universal credit – the single monthly benefit payment that will replace separate weekly allowances for housing and other living expenses which is being phased in stages across the UK until 2017.

The subject of benefit tenants in the private rented sector has been attracting a fair amount of attention in recent weeks after it emerged that some of the UKs best-known landlords were serving eviction notices on tenants claiming benefits because they regularly missed rent payments.

But Graham Kinnear, managing director at Landlords Assist insists that housing claimants can make good tenants and is urging landlords not to totally dismiss them.

He says: “It is very concerning that a recent investigation revealed that some landlords in the market place are not willing to take on Housing Benefit tenants.

“Properties that tend to attract Housing Benefit tenants often provide a higher yield and therefore an enhanced possibility that the rent will be greater than the mortgage repayment. For landlords this is essential to their business plan.

“It is, in our view, very shortsighted to impose a blanket ban on tenants in receipt of a benefit award. A far more sensible method, in our opinion, is to look at the application on a case by case basis and consider each tenant on their individual merits. After all, working tenants who aren’t on housing benefit are probably only a redundancy letter away from being a social benefit applicant themselves.”

Stephen Parry, commercial director at Landlord Assist adds: “Landlords need to realise that a bad tenant is a bad tenant regardless of whether they receive housing benefit or not, and shouldn’t dismiss them simply because of the image that is portrayed in the media. We have seen our fair share of awful working tenants who have fallen into rent arrears and caused damage to properties.

 

“Tenants receiving housing benefit can be some of the best tenants on the market because they tend to stay in a property for a longer period of time, resulting in fewer voids and changeovers for landlords.

 

“In contrast working tenants can be less stable as they tend move on more quickly and like the flexibility that comes with renting.

 

“Our advice to landlords concerned about letting out their properties to tenants in receipt of housing benefit is to conduct thorough referencing checks on their tenants and to insist that they have a guarantor in place to cover the rent payment should they fall into arrears.”

Written by Julie Hanson

Julie is passionate about property – development, investment and portfolio planning. Along with husband Alec, Julie is actively building a property portfolio while helping others to do the same.

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