Private landlords plan to snub tenants on benefits
One in four private landlords are looking to reduce the number of tenants claiming local housing allowance in their portfolios, following welfare reforms.
A survey by consultancy BDRC Continental reveals 25 per cent of landlords are examining ways of reducing their number of LHA tenants. The study shows 15 per cent of landlords will stop offering LHA tenancies while 32 per cent will look at reducing LHA tenancies when capping affects their lettings.
The report’s findings are the first sign that the government’s welfare reforms could lead to private landlords withdrawing from providing homes to rent for people on benefits.
From April this year, LHA has been capped at between £250 and £400 a week depending on property size, while the five-bedroom rate has been removed. In October, a further restriction comes into place when LHA rates will set at 30 per cent of market rents and not at the average as currently.
Mark Long, business propositions director at BDRC Continental, said: ‘The predicted demand for privately rented accommodation has risen since the first quarter of 2011, with LHA claimants accounting for 35 per cent of tenants in the sector.
‘However, the proportion of LHA claimants has already dropped by four per cent since the first quarter of 2011 and a significant number of private landlords are saying they will respond to the capping of the LHA scheme payments by withdrawing from that sector of the private rental market.
‘It will be interesting to track the impact of LHA capping as it plays out across the private rental sector.’
The research was based on interviews with 662 landlords.