The warning comes from the Financial Times which says that huge a part of the south coast and outer London will see landlords being hit hard by the proposed £23,000 a year cap on benefits.
The newspaper has used data modelling to predict what the result will be and it has predicted that areas in the capital where people are on low incomes and receiving housing benefit will be hardest hit. The data reveals that around a quarter of tenants in the private sector in England are receiving housing benefit - a rise of 90% in the last six years.
Issues with Universal Credit for BTL landlords
Part of the issue is that all benefits are to be rolled into a single payment called Universal Credit. The idea is that people will be better off working than they would be living on welfare. However, this will also affect the ability of tenants to pay their rent.
The founder of Landlord Action, Paul Shamplina, said he had already seen a lot of London landlords 'exiting the market' in the last 18 months. He said landlords in the capital and the south coast were finding it increasingly hard to find tenants who can afford to pay the rent.
Another issue, he said, is that landlords are finding growing numbers of tenants who are subletting rooms to benefit claimants who cannot afford a home of their own.
‘It's going to get tougher for landlords’ Mr Shamplina told the newspaper: “Rents are so high in London that tenants are moving and being evicted to places like Slough and Birmingham. It's going to get tougher for landlords.”
The chief executive of the National Landlords’ Association, Richard Lambert, said that landlords were increasingly unwilling to rent properties to those on benefits because of the proposed welfare reductions. He added: “This will put society's most vulnerable in a difficult position.”
This will in turn, he explained, leave these people exposed to unscrupulous and exploitative landlords.
Landlords being warned over the problems of cannabis farms
Meanwhile, insurance firm Direct Line says that police forces around the UK seized half a million illegal cannabis plants from private properties last year. Most plants were found in London but even in areas like Wiltshire, police are finding a growing problem with cannabis farming.
Now Direct Line for Business says that landlords need to be vigilant against criminal activities.
They say that a private rental property that has been used for cannabis farming can result in devastating damage and, potentially, a voided insurance policy. A spokesman for the firm said: “The consequences for a landlord can be financially catastrophic and landlords should check their insurance policy covers structural damage as well as malicious damage.”
