Landlords avoiding benefits tenants
Landlords avoiding benefits tenants due to Osborne’s tax changes
It makes sense that landlords are now looking to house tenants less likely to miss rental payments in order to minimise the impact of a number of tax changes to the Private Rented Sector (PRS). This does means that tenants on benefits could miss out on rental homes as they are typically viewed as ‘riskier’. Although when you think about it a person on benefits is almost guaranteed a regular source of income.
We surveyed our landlords and almost 60% of them said that the Chancellor’s decision to restrict buy-to-let mortgage interest to the basic rate of income tax from 2017 will reduce their profitability and are now more stringent in their tenant checking. With 30% of them stating they now need to priories other tenant types over perceived ‘riskier’ tenants due to the reduced profit margins.
We asked our landlords that do rent to tenants who receive housing benefits if they had experienced rent arrears, almost 80% of them had to chase for rent arrears.
The majority would seriously reconsider letting to this type of housing benefit should their existing tenant move out or have to be removed due to excessive arrears.
Interestingly all would consider renting to tenants in receipt of benefits if the rent was guaranteed by local authority or paid directly to them.