Research from the NLA (National Landlords Association) claims that 54% of private landlords can no longer afford to rent a home to tenants who are in receipt of housing benefit. Due to the cuts to allowances, 70% claim they will not have any housing benefit tenants living in their properties that are covered with buy to let property insurance by 2015.
The research also showed that half of the landlords questioned believe Local Housing Allowance (LHA) cuts are making it unaffordable for them to rent to people on benefits, with tenants aged under 35 expected be hit the hardest by the changes. The LHA cuts have seen maximum rent benefit payments reduced to the 30th percentile of local average market rents rather than the previous 50th percentile. The age a tenant on benefits qualifies for more than a single room in a shared house has also been increased by ten years to 35 and this is forcing many into shared accommodation.
One member of the NLA said: “The reforms have completely ignored the question of supply, which is being damaged by other housing policies like Article 4 Directions. Where exactly is the shared housing meant to come from, to house these benefit claimants aged under 35? They are being forced into competition with relatively well-paid young graduates and students, and there is no sign of landlords increasing the number of HMOs to meet the increased demand unless they get help from the government.”
The National Landlords Association has also reported that, despite the fact that any private landlord who drops their rent, voluntarily qualifying for direct payments of LHA, only 25% of their members have been approached by the local council about this.