The recent story of landlords Fergus and Judith Wilson, who own nearly 1000 properties, banning tenants on housing benefits has rightly received widespread media attention. Rentify is in a good position to understand the difficulties that housing welfare reforms could bring, but we urge all landlords to consider the implications of such blanket bans. Not only could they significantly limit your chances of finding new tenants, they could also lead to public outcry, a backlash against landlords and further regulation. That is to say nothing of the negative social impact. Rentify has produced a helpful guide on Housing Benefits, which is free to download (along with our other guides).
Under the current Housing Benefit system (i.e. not Universal Credit), the amount a tenant can receive is based on the cheapest 30% of properties in the area. This means that 1/3 of homes in your area should be affordable to those on benefits. If your property is in that bracket you should have a large market of benefits tenants available to you. Of course, this becomes more cloudy under Universal Credit where the tenant receives one lump sum for all of their benefits and must budget accordingly. The big worry is that landlords (generally) will not receive rent directly from the council, creating more uncertainty. But there are still many things you can do before bringing in a ban on benefits tenants and each case must be judged on its individual merits. Consider making the setting-up of a direct debit for rent a condition of the tenancy agreement. Move the rent payment day closer to the day the tenant receives their Universal Credit payment. Encourage your tenant towards a jam jar account, which allows them to budget easily and keep their rent money separate from spending money. Finally, look into credit unions: these could be a big help and should have accounts which transfer the money directly to you without the tenant having to worry about budgeting the rent.
It is of course understandable that people who have had bad experiences with benefits tenants in the past will be wary of the introduction of Universal Credit. All Rentify wishes to highlight is that there are other options which could really help you out. Furthermore, if there was to be a widespread rejection of benefits tenants, the Government would almost certainly react. They rely on private landlords to help ease the housing shortage. A significant reduction in the number of properties available to benefits tenants would make them less inclined to promote the sector, especially in the face of the negative press coverage that would be sure to follow.