Landlord Assist is concerned that the growing number of landlords refusing to accept tenants in receipt of housing benefit could have drastic consequences on the social housing sector.
The nationwide tenant referencing and tenant eviction firm believes the introduction of licences in some areas, combined with a reduction in Housing Benefit payments received by tenants, is forcing many landlords to leave the sector.
Stephen Parry, Commercial Director at Landlord Assist is worried that this could lead to a deep social housing crisis affecting many lower income and vulnerable households.
He says: “A number of local authorities have introduced licensing schemes for landlords, whereby they are required to pay a significant licence fee for the ability to rent their property. As a result many landlords are now diverting their attentions to other areas of property investment.
“Local authorities have also reduced the amount of Housing Benefit that some people are entitled to, which could lead to an increase in rent arrears for some landlords and a growing disparity between the amount a housing benefit tenant can pay and the market rent.
“Not surprisingly, due to a lack of supply of rented accommodation in the private rented sector, landlords now feel less reliant on housing benefit tenants to fill their properties. This is simply the harsh reality, but the net result could potentially be a deep housing crisis as local authorities have little available accommodation and are not building enough new properties to satisfy demand.”
Graham Kinnear, Managing Director at Landlord Assist says: “There needs to be a concerted effort by local and central government to work with the private sector and encourage private landlords to rent to housing benefit tenants.
“Many landlords feel that they are being penalised by local authorities and coerced into providing an ever increasing quality of accommodation for an ever decreasing return. Some lenders are shying away from landlords who rent to housing benefit tenants and we are worried that the proposed introduction of Universal Credit, whereby claimants receive a single payment rather than a combination of benefits, could make the situation far worse than it currently is.
“There are a number of incentives that the Government could offer to redress this issue. Tax breaks could be used and local authorities could undertake the role of guarantor to encourage private landlords to take on tenants in receipt of a benefit award.”
Landlord Assist provide services and advice to landlords and letting agents and can be contacted on 08707 662288 or via their website www.landlordassist.co.uk.