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Landlords shun tenants on housing benefits as risks rise and profits shrink

A growing rental crisis leaves benefit claimants with fewer options. From Blackpool to Enfield, even affordable areas now see landlords turning away those who depend on housing support.

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2 min read
The image shows a row of colorful houses on the corner of a street, with windows and doors, a metal...
The image shows a row of colorful houses on the corner of a street, with windows and doors, a metal fence, a signboard with some text on it, some plants in pots, a trash bin, some wires, and a cloudy sky. The signboard reads "Rental Homes for Rent, Listid 29058910, Location 5901 S Elmwood Ave Chicago 60618".

Landlords shun tenants on housing benefits as risks rise and profits shrink

Landlords are increasingly avoiding tenants who rely on housing benefits to pay rent. While some areas still see high numbers of benefit claimants in private rentals, many property owners now view these tenancies as riskier and less profitable. New research highlights the growing divide between regions where benefits make letting viable and those where landlords refuse such tenants outright.

In certain parts of the UK, over half of private renters receive housing benefits. Redcar & Cleveland, Blackpool, East Northamptonshire, Enfield and Tendring top the list for benefit-dependent tenants. Here, a mix of low property prices and higher benefit rates can make letting to claimants financially attractive for some landlords.

Yet even in these areas, willingness to accept benefit recipients is shrinking. Dr Julie Rugg, who led the research, pointed to Universal Credit as a major deterrent. Delays and administrative hurdles have pushed many professional landlords to reject tenants on benefits entirely. For most landlords, letting property has become less appealing overall. One described stocks and shares as a safer bet, citing lower returns and more hassle from rental properties. As a result, the majority of lower-income lettings now happen outside benefit-heavy markets, where landlords still see some stability. The trend is clear: while a minority of landlords with cheaper properties still prefer benefit claimants, most now favour tenants who pay rent independently. This shift is reducing options for those who rely on housing support to secure a home.

The number of landlords open to benefit recipients continues to fall, even in high-claim areas. With Universal Credit complications and shrinking profit margins, fewer property owners see these tenancies as worthwhile. The result is a tightening rental market for those who depend on housing benefits to afford accommodation.

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