The private rental sector is experiencing a soaring demand from tenants on benefits.
The latest RICS quarterly rental survey, covering the quarter to the end of July, says that 13% of all new lets were to housing benefit tenants. The statistic is up from 8% the previous quarter and is the highest since the RICS began its surveys in 1999.
These figures are supported by lettingaproperty.com, the Online Letting Agent which shows that in the month of August, of the 836 viewings that were arranged for private landlords, 71.9% were with employed tenants and 8.9% were tenants unemployed and in receipt of benefits.
These number are broken down further into:
| Tenant Status | % |
|---|---|
| Employed | 71.9% |
| Self Employed | 5.5% |
| Retired | 1.5% |
| Student | 12.3% |
| Unemployed | 8.9% |
Overall, new tenant demand again outpaced supply of rental property in the three months to July, as more people continued to turn to the lettings sector.
As a result of this, rents continued to increase, although the survey indicates that the pace of growth moderated slightly.
However, the imbalance between demand and supply is likely to persist, suggesting that further gains in rents are likely over the coming months.
The number of new landlords continue to edge upwards, albeit only modestly.
Surveyors report that where tenancies are coming up for renewal, some landlords – particularly those in London and the South-East – are now choosing to sell a property, leaving fewer rental properties available.
RICS spokesman James Scott-Lee said: “The combination of strong tenant demand and a limited stock of good quality properties on offer is pushing rents ever higher across much of the country. This is the case both for houses and flats.”
Jonathan Daines, co-founder of lettingaproperty.com comments: “We have certainly seen an increase in demand from tenants on benefits over the years. Landlords should be aware of the advantages and disadvantages to letting their properties out under such circumstances.
“Whilst the rent can be paid directly to the landlord from the Council, if the tenant does make a false claim and has been overpaid, the Council normally has the right to claw-back the overpayment from the landlord directly.”
“Of course, the majority of tenants on housing benefits are good tenants and tend to stay longer in the property thus reducing void periods, sometimes, dealing with the red tape can be a bit of a minefield for the first time landlord.”
For more advice on letting a property to tenants on housing benefit, please call the lettingaproperty.com support team on 0330 660 1020.
As a previous private landlord who rented to a tenant on housing benefits through a letting agent I would strongly advise against. The only time my rent was paid on time was the first month. I had to wait three months before I got my next batch of rent. They then stopped paying altogether until I had my tenant evicted which involved court proceedings and a baliiff resulting in 9 months with out rent being paid with the only response from the council that my tenant’s “circumstance had changed.” They were not bothered by the fact that she was living there with two children and being evicted. The council took no responsibility for the damages my tenant caused; carpet covered in dog pooh and wee requiring me to have to recarpet my whole entire flat, repainting the flat because of holes in the walls, cooker destroyed, bed and couch broken beyond repair It took over a month to get it in a livable condition for anyone to rent it. Therefore I would recommend holding out for a private tenant.
Thanks for your comments Kim. We hope that this is a lesson that not all landlords have to learn!
I am a single parent of 3 children and have found myself reliant on housing benefit. my rent is extremely high and i have never not paid, borrowing from family if i have to. I get annoyed with other HB tenants who treat properties badly as this does not reflect everyone who finds themselves in this situation. Sure i would love to be able to provide my kids with a permanent home, this being my 8th home, but l/lords feel they can just charge what they like and treat their tenant poorly as we recieve benefit. Never mind the fact that i am a qualified property surveyor and my kids who are aged 9, 3 & 2 are on wait lists for my local nurseries so that i can get back to work. We are not all scroungers and i am now struggling to find somewhere cheaper to live so that i can afford to go back to work. Some estate agents dont even return calls if they know you receive benefit, please look at everyone differently as we are not all bad.
i heared about this from my friends aswell. the main reason behind this is due to the increased number of teenage students from out side the UK. Uk has giving opportunities to number of students from Asia. this leads to search for lettings in more higher rate in UK.
I would agree that there is an increase in the number of students from outside the UK looking for property which contributes to the number of tenants turning to private tenants as it is becoming increasingly difficult to get council homes now.
Its not correct to tag all HB tenants as ‘bad tenants’. There are good and bad tenants from all sections of society. As landlords we have to take responsibility for vetting prospective tenants thoroughly. I used to have huge problems with rent arrears, damage to property etc until I started to insist upon having a homeowning guarator for every tenant. This reduces the incidence of rent arrears and damage because tenants don’t want to let their guarantor down. When a problem does occur the guarantor usually ensures it is rectified quicky as they do not want to put their own home at risk.
Thanks for post this blog.really its useful
You can’t really blame Housing benefit tenants for wanting to live in a higher standard property. The fact the landlord knows he is going to get a monthly payment from the government also helps. Landlords tend to have carried out improvements to property from recommendations from a Landlord EPC