The housing supply for low-income renters is unsustainable

The majority of landlords do not want to let to people on housing benefits, according to a new study published by researchers at the University of York. 

The researchers found that the regions with the highest levels of housing benefit claims are: Redcar & Cleveland, Blackpool, East Northamptonshire, Enfield and Tendring.

They all have a private rented sector where 55% or more tenants receive housing benefits.

According to the study, the vast majority of lower-income letting takes place outside of this benefit dominant market. This is because landlords are generally unhappy about the long delays associated with the initial payments of the housing benefit and the problems of managing Universal Credit.

The majority of landlords were of the view that it was easier to let to tenants who did not need help paying the rent.

As a consequence, there are concerns that the number of landlords willing to let to benefit recipients in these locations is diminishing.

The researchers also highlighted that there are some locations where increases in the housing benefit rates combined with low house prices mean that landlords can achieve better returns by letting to benefit recipients compared to letting on the open market.

Some landlords with lower-rent lettings preferred tenants who received housing benefit. As one small Teesside landlord said: ‘I won’t discriminate. I’m from a pretty poor background myself. We always lived in rented accommodation when we were kids. If people aren’t working it doesn’t necessarily make them a bad person. In my mind, it’s almost safer than letting to somebody who’s employed.’

Lead author of the project, Dr Julie Rugg said: ‘This research has really helped us understand how landlords at the lower end of the market pay for and manage their property.

‘It’s a real concern that many good, professional landlords are no longer letting to housing benefit claimants because of the way that Universal Credit is administered.

‘Letting property looks altogether different to landlords now: it looks like a much risker proposition, delivering a lower level of return and with a lot more hassle.

‘As one landlord said to me, ‘stocks and shares may not deliver the same level of return, but they don’t phone me on a Sunday morning because the boiler’s bust.'”

Photo by Ethan Wilkinson