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Landlords to move away from the housing benefit sector says NLA

Housing benefit tenants are set to lose out on private rented homes as landlords look to tenants less prone to missing rental payments, in order to minimise the impact of last year’s Budget, according to the latest research from the National Landlords Association (NLA).

The NLA said that 60% of landlords reported that the Chancellor’s decision to remove mortgage interest relief from 2017 – announced in George Osborne’s July 2015 Budget – will reduce their profitability. In order to recover costs, 20% of those landlords say they will need to prioritise other tenant types over those perceived to be ‘riskier’ – such as tenants in receipt of housing benefit.

Tenants on housing benefit are typically viewed as riskier because of high incidences of missing rental payments, caused in part by the widening gap between market rents and the amount of benefit available to claimants. In the last year, two thirds (64%) of landlords with tenants in receipt of housing benefit experienced rent arrears.

Furthermore, over the past four years, the proportion of landlords who let to tenants in receipt of housing benefit has almost halved, with the trend looking certain to continue.

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