Research Welfare Reform and Homelessness

Landlords cut back on renting to young people

Dr Tom Simcock
Written by Dr Tom Simcock

Younger people will have more difficulty finding rented accommodation in coming months as a substantial proportion of landlords actively cut back on renting to under-35s.

Although nearly all landlords are willing to rent to under-35s, nearly a third are changing their letting strategy, mostly to ensure that they have security of rent payment.

These are the findings of a major piece of independent research commissioned by the Residential Landlords Association (RLA) and undertaken by Sheffield Hallam University involving nearly 2,000 mostly individual private landlords.

The research found that 79 per cent of landlords who let to under-35s cited the higher risk of rent arrears as a reason for reducing the numbers in this category that they took on as tenants.

Two-thirds of landlords are not willing to let to under-35s on Housing Benefit or Universal Credit and 44 per cent are not willing to let to students. Amongst landlords whose lettings practice had been affected by the extension of the Shared Accommodation Rate to all under 35s in 2012, 68 per cent 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 increases, providing tax relief for longer tenancies and the better administration, and direct payment to the landlord, of housing costs under welfare payments.

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

Commenting on the research report, Alan Ward, Chair of the RLA, said:

“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.

“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.”

The research is being launched today on the website of the RLA’s new Private renting Evidence, Analysis & Research Lab (PEARL).

With projections that the private rented sector will by the mid 2020s account for a quarter of all households , the RLA’s Research Lab will seek to ensure future policy affecting the sector is grounded in clear evidence and that the implications of decisions taken by government and local authorities affecting it are clearly understood.

It will be a one stop site for factual information on issues such as rents and trends in housing tenure, along with research undertaken by the RLA, academics and other key players in the market.

Dr Ben Pattison’s blog post on this research can be found on PEARL here:

The full report can be accessed here:

The RLA’s new Private renting Evidence, Analysis & Research Lab (PEARL) can be found here:

Don’t forget to follow RLA PEARL on twitter here: @RLA_PEARL

The RLA currently runs a managing rent arrears course. For more information, dates and to book please click here.

About the author

Dr Tom Simcock

Dr Tom Simcock

Tom is the Senior Researcher for the RLA and leads the RLA’s research lab; the Private renting Evidence, Analysis and Research Lab (PEARL). His expertise lies in researching change in society, public policy and quantitative and qualitative research methodologies. Tom’s research on housing has received national media coverage, featuring on the front page of The Times, has influenced government policy making, and has been cited in debates in the House of Commons, House of Lords and by the London Mayor.

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