Benefits tenants increasingly denied by buy-to-let landlords

Such products as Rent Guaranteed from Advanced Rent (http://www.advancedrent.co.uk) are designed to cater for a very real need among buy-to-let landlords for the enhanced financial security that allows them to plan their budget in advance with more confidence, even possibly expanding their portfolio. If any more evidence was required of this being a major concern for many landlords in the present financial climate, one only needs to look at the way benefit reforms seem to be impacting on the buy-to-let market.

An industry survey has suggested that there has been a sharp drop in the number of landlords renting to tenants claiming benefits. Last month, the proportion of landlords with tenants receiving Local Housing Allowance (LHA) was 27 per cent, compared to the 34 per cent figure recorded in March, the last time the poll was conducted. April saw changes to welfare in which the amount of total benefit that families with children could claim was capped at £500 per week, with individuals being limited to £350.

Such a rule, which was initially introduced in several London boroughs in mid-April ahead of a roll-out to the rest of the country over the summer, understandably prompts many landlords to reconsider their landlord rent insurance policy, given the impact that it has on the amount paid under the LHA. The London buy-to-let market was expected to be affected most, given the far higher rents in the capital than elsewhere, with large families also especially feeling the pinch. Fast-rising rents and high income yields have led to millions of Britons becoming landlords, and subsequently rent guarantee insurance policyholders.

Now, however, the National Landlord Association (NLA) has conducted research showing the depth of concern over the changes among all landlords -  not just those renting to what it estimates to be one million tenants receiving help with their housing costs. It found that 38 per cent of all landlords were worried about the impact of Universal Credit, while more than half (51 per cent) were making the active choice to avoid letting to benefit claimants. Whereas housing benefit is presently paid to landlords rent insurance policyholders directly, Universal Credit will include it as part of a single payment made to claimants.

The NLA has cited fear among its members of budgeting problems arising as a result of tenants being paid on a monthly, as opposed to a weekly or fortnightly basis, with landlord payments not being the greatest priority. Concern was most pronounced among landlords with single properties or smaller portfolios, with letting to benefits claimants having already been ruled out by six in 10. This is not good news for a government that depends on the private rented sector to support housing provision for benefit recipients.

Nor is it a positive development, of course, for the landlords that are becoming more and more dependent on rent indemnity in economically straitened times. Thankfully, Advanced Rent (http://www.advancedrent.co.uk) offers Rent In Advance and Rent Guaranteed, two highly regarded and trusted industry products.

Editor’s Note: Advanced Rent (http://www.advancedrent.co.uk) are represented by the search engine advertising and digital marketing specialists Jumping Spider Media. Email: info@jumpingspidermedia.co.uk or call: +44 (0)20 3070 1959 / +34 952 783 637.