by Mark Johnston
PRIVATE LANDLORDS BEGIN TO REFUSE TENANTS ON BENEFITS.
It estimates that over one million renters in the UK currently receive help with housing costs.
Letting to people who are dependent on benefits has never been easy for landlords but the recent changes to housing benefit seem to have been a step too far for many.
Under changes to welfare made by the government in April of this year, the amount of total benefit that could be received was capped at £500 per week for families with children and £350 per week for individuals. It also introduced universal credit.
Universal Credit will replace a whole range of benefits so that a single monthly payment is made to claimaints, which will include housing benefit. Currently, this is usually paid directly to landlords.
Many landlords are therefore concerned that with recipients receiving money monthly, rather than weekly or fortnightly it could lead to budgeting problems and so payments to landlords will be a low priority.
According to a recent industry survey the proportion of landlords renting to tenants on benefits has dropped from 34 per cent to 27 per cent as the new welfare reforms began to kick in.
Research by the National Landlords Association (NLA), shows that 38 per cent of all landlords, regardless of whether they have tenants on benefits, are worried about the impact of new welfare reforms and 51 per cent are actively choosing not to let to benefit claimants.
It also revealed that many of this group are planning to do so in the next 18 months, and one third have already decided to take immediate action.
It appears then that these particular figures are showing the first sign of how welfare reforms are starting to affect the buy to let market.
Experts believe that private landlords are turning away social tenants at a time when they are needed most to meet housing need an therefore people on social housing benefit could end up struggling to find a suitable and also affordable place to live.
Although renting is a business many insiders feel that landlords must balance their needs with an understanding of the pressures experienced by their tenants.
However, it does not help that at the moment some mortgage lenders are increasingly not allowing private landlords to let to tenants who are in receipt of benefits, this is mainly due to the fact that the lenders think that the risks of landlords getting in to trouble, going in to arrears and ultimately being repossessed are just too great.
With nowhere else to go, more families will need to be put up in expensive bed and breakfast accommodation or hotels by local authorities and this comes at a high cost to the taxpayer.
Therefore in conclusion some industry insiders suggest that the solution is for the government to look at their welfare strategy. A good place to start would be to amend the universal credit to initially allow tenants to nominate payment of the housing benefit element to be made direct to their landlords.
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