Industry News Rhianna Abrey 08/04/2021

Rent guarantees could be key to encourage landlords to rent to Universal Credit claimants

The private rented sector is becoming increasingly important to fulfil the housing needs of those who would have otherwise relied on the social sector. However, both Universal Credit payment issues, and a lack of awareness about how to let to vulnerable tenants, may have prevented private landlords from playing a bigger role in providing solutions to the ongoing homelessness crisis. 

A landmark study launched today explores ways to increase the willingness of landlords to rent to people receiving housing benefits.  Rent guarantees and upfront cash payments from local authorities were shown to be most effective in opening up the sector for people receiving benefits according to major new research from the Centre for Homelessness Impact, the Behavioural Insights Team and the National Residential Landlords Association.  

The centrepiece of the new research was an online trial involving more than 2700 landlords, who were members of the NRLA.  

The research involved landlords considering applications by prospective tenants who receive Universal Credit. One set of landlords were sent additional information on pre-tenancy training, a budget planner including the tenant’s income and expenditure, or an alternative payment arrangement (which allows direct payment of the housing element of Universal Credit to the landlord). Landlords who received information about these reported very similar willingness to rent to potential tenants as those who received no additional information. This suggested that these are less effective at changing attitudes than previously expected.  

In addition to this, the research looked at which local authority incentives or support programmes are most effective at increasing landlord willingness to rent to someone receiving Universal Credit including £1000 cash up front, a rent guarantee, deposit bond or support from a landlord liaison officer.  The research revealed that rent guarantees and upfront cash payments from local authorities were most effective at encouraging landlords to rent to Universal Credit claimants. 

Ben Beadle, Chief Executive, National Residential Landlords Association said: 

“As the research shows, the central element for landlords is continued rent payments. Government holds the key to this, through continuing to link local housing allowance to market rents, improving the administration of Universal Credit and better utilising guaranteed rent schemes at a local level. Without taking these vital steps, the Government will not tackle the homelessness crisis.”   

You can read more information on the NRLA's campaign and the landmark research here

To read the full research report click here.