Landlords are Cutting Back on Letting to Young People, Study Reveals

Young people will have more difficulty finding private rental housing over the coming months, as a large proportion of landlords is actively cutting back on letting to under 35s, a new study reveals.

Although nearly all landlords are willing to let to under 35s, almost a third are changing their lettings strategies over the coming months, to ensure that they have security of rent payment.

Landlords are Cutting Back on Letting to Young People, Study Reveals

Landlords are Cutting Back on Letting to Young People, Study Reveals

The findings arrive from a major piece of independent research commissioned by the Residential Landlords Association (RLA), which was undertaken by Sheffield Hallam University, involving nearly 2,000 mostly individual private landlords.

The study found that 79% of landlords who let to under 35s cited the higher risk of rent arrears as a reason for reducing the number of tenants they accept in this category.

Two thirds of landlords are not willing to let to under 35s on housing benefit or Universal Credit, while 44% will not let to students.

Amongst landlords whose lettings businesses have been affected by the extension of the shared accommodation rate to all under 35s in 2012, 68% had reduced or stopped letting to under 35s on benefits.

Four fifths of landlords who continued to let to housing benefit or Universal Credit claimants had put in place additional safeguards – the most common being the use of guarantors or asking for direct payment to the landlord.

When asked what would encourage them to increase lettings to under 35s, landlords called for a reversal of recent tax hikes, tax relief for longer tenancies, and the better administration of (and direct) payment to landlords of housing costs under welfare.

By far the most popular initiative that landlords wanted to see to encourage them to take on more young people as tenants was the introduction of bond or tenancy deposit schemes under which organisations, such as local authorities and charities, offer loans to tenants to cover the cost of deposits.

Landlords, remember that the best way to protect your income against rent arrears is with Rent Guarantee Insurance. This peace of mind cover ensures you still get paid if your tenant can’t. Get an instant online quote here: https://www.justlandlords.co.uk/rentguaranteeinsurance

The Chair of the RLA, Alan Ward, comments on the study: “This research suggests that landlords are moving away from accommodating under 35s, especially those who are on benefit, out of concern that they will not get paid.

“The report notes that landlords are not necessarily looking for higher rents or increased yields from their properties. Instead, the emphasis is on reducing risk, particularly in relation to rent arrears and the administration of welfare payments.”

He explains: “We have already held constructive talks with the Government about this and we will keep the situation under review, but there is a need for policymakers to engage further with landlords to consider what more action can be taken to address this decline. Without this, many under 35s are likely to struggle to access any accommodation.”

Landlords, what are your thoughts on letting to young people? And will you stop letting to under 35s in the near future?

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