Landlords urged to accept more tenants on benefits to ease housing shortage

Jake Carter

March 16, 2021

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Landlords are being urged to accept more tenants on benefits in order to ease the UK housing shortage, according to Pick My Pad.

Despite the ban on landlords refusing tenants on benefits, there is a growing shortage of social housing and private accommodation for the homeless and individuals and families claiming Universal Credit or housing benefits.

An appeal was made from a social housing organisation working with Bridgend Council to private landlords, asking them to lease their properties for emergency housing to boost its shortage of accommodation.

Private landlords are being offered a scheme featuring one to three-year lease agreements, guaranteed rent and a full management service.

There are 889,000 tenants currently receiving housing benefits in the UK, and private renters claiming housing benefits has more than doubled over the last decade.

Although the new ruling on 1 July 2020 banned landlords from discriminating against tenants with ‘no DSS’ adverts and requests, figures show that 63% of private landlords say ‘they do not let’’, or “prefer not to let” to people who receive housing benefit.

The ruling declared for the first time that “rejecting tenancy applications because the applicant is in receipt of housing benefit was unlawfully indirectly discriminatory on the grounds of sex and disability”.

Landlords who have a blanket policy of refusing all tenants who claim benefits risk legal action.

According to Shelter, discrimination against renters who receive housing benefit is widespread on OpenRent’s platform.

In November 2020, Shelter carried out an analysis of OpenRent’s website looking at properties available in four of the biggest cities – London, Manchester, Birmingham and York.

Of the total 11,534 adverts analysed, only 16% of these accepted housing benefit recipients.

This is substantially lower than the one third claimed by OpenRent.

Mish Liyanage, managing director of Pick My Pad, said: “It’s shocking to still landlords refusing to house tenants on benefits, several months after the new ruling.

“For years, so-called ‘no DSS’ policies have stopped hundreds of thousands of people from renting homes because they receive housing benefit.

“The good news for landlords that are happy to take on LHA tenants, is that several mortgage lenders have revised terms and conditions to make sure there was no restriction on letting to people on benefits.

“In many inner-city areas higher than market rents can be achieved letting to tenants on benefits. These increased LHA rates mean much higher yields and a healthy cashflow.

“For example, monthly rental for LHA tenants is Salford is 35% more than the average private tenant rents.

“Tenants on receipt of benefits tend to stay much longer than professional tenants, which means less voids and increased cashflow.

“Direct payment can be obtained in a large number of tenancies, therefore reducing the risk of arrears.

“Whether landlords have new tenants moving in or migrating during the tenancy, Pick My Pad can provide support in the transition from Housing Benefit to Universal Credit to ensure all requirements are met.

“It can seem complicated, however working with Pick My Pad as a partnership will ensure that the transition is completed as quickly and hassle free as possible for landlords.”

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