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Online letting agent's recently published research shows that only 18 per cent landlords would rent to housing benefit tenants and that more than 80 per cent landlords would not even show them their properties.
The 82 per cent of landlords who are refusing LHA (Local Housing Allowance) tenants say that their main concern with this group is that they will not respect landlords' properties as those who are private renters, they also believe that LHA tenants are more likely to get into rent arrears than those who do not receive the allowance.
Eleanor Carroll, director of the online agents, said: "Growing numbers of the 1.4 million private landlords in Britain are increasingly refusing to let property to tenants on benefits. Mortgage lenders and insurers are also growing wary,
"Their main reason for landlords turning away housing benefits tenants is the government’s welfare reforms. Many landlords have adjusted to LHA after its introduction in 2008.
"However, recent limits on housing-related benefits and the introduction of universal credit have caused concerned for many landlords and pose too much risk for some."
Carroll also said that another reason why landlords do not wish house LHA tenants is because the benefit is determined by using a formula, whereby the allowance is equated to the cheapest third of properties available in the wider market that have the same number of bedrooms.
She said:"In practice, open market rents in some regions have outstripped the LHA calculations. It’s very much regional. In some areas of high demand there is a large and widening gap. In other areas like the North East there is not much difference between the LHA and market values,"
Research carried out elsewhere, shows that the numbers of landlords willing to accept LHA tenants has dramatically declined by over 50 per cent in the last three years.
Although Carroll did say that around 100,000 landlords actively seek to engage this sector of the market and commented: "In spite of all this, the fact remains that benefit claimants remain more profitable than many types of tenants. According to the latest data on landlord returns, letting property to those on benefits delivers excellent returns,"
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