Access to homes for under-35’s: The impact of Welfare Reform on Private Renting
The recent Housing White paper highlights the extent to which policymakers are increasingly looking to the private rented sector to accommodate younger households. At the same time a number of regulatory and taxation changes are influencing the operating environment for private landlords.
This report outlines the findings from a survey of landlords and lettings agents, exploring their experiences with, and perceptions of letting to under-35 year olds. A total of 1,996 responses were received and analysed.
- The vast majority of respondents were happy to let to all or some under-35s. This group were a major source of demand. However, many landlords have decreased their lettings to some groups of under-35s.
- There were specific issues or policies which made landlords unwilling to let to particular groups of under-35s. Two-thirds were not willing to let to Housing Benefit/Universal Credit (HB/UC) claimants.
- Reasons for not being willing to let to particular groups of under-35s tended to fall into two categories − difficulty in managing the accommodation and fears about financial loss.
- Four-fifths of landlords/agents who continued to let to HB/UC claimants had put in place additional safeguards in the last three years. The most common safeguards were the use of guarantors or direct payment to the landlord.
- Two-fifths of respondents provided shared accommodation. This demonstrates the importance of this type of accommodation in the private rented sector.
A range of policy changes or initiatives would make landlords more willing to let to under-35s. Over half of landlords/agents favoured tax changes − reversing changes to Mortgage Interest Relief and/or providing tax relief for longer tenancies. Four out of five would be more willing to let to under-35s with a bond or rent deposit scheme.
The decline in landlords willing to let to certain types of under-35s − particularly HB/UC claimants − represents a major challenge to government’s policy approach to the private rented sector.
It appears that landlords are not necessarily looking for higher rents or increased yields from their properties. Instead there is evidence that many are seeking a reduction of risk − particularly in relation to arrears and the administration of welfare payments.
There is an urgent need for policymakers to engage with landlords to ensure that under-35s − particularly those on HB/UC − can still access accommodation within the private rented sector.