Confidence amongst landlords is increasing, leading to speculation that the rental demand in the private sector will continue to grow. Despite the Government’s push to help more people get on the property ladder and own their own home through the likes of the Help to Buy scheme, many still cannot afford the deposit and are left with no option but to rent.

Rising property prices and high rental yields have meant that buy to let property investment has once again become the choice and dream of many and almost a fifth of existing landlords are planning to expand their property portfolio and around 16% already bought another property last year. Many more people are hoping to get in on the buy to let boom as climbing tenant demand and good rental yields mean a good long term investment.

But along with the confidence in the buy to let market and the rise in monthly rents, there comes a dark side. With landlords able to charge more for their properties and an ever increasingly demand for houses, many tenants on welfare are facing eviction as they cannot afford the rent. Recently a large landlord made the decision to stop accepting tenants on housing benefit, sending out eviction notices to any tenant on benefits. And others are following suit, such as one agent in Kent with over 1,000 properties. This could create benefit black spots, where those on low income cannot rent in a town of their choice. The Housing charity Shelter has said that if action is not taken there could be whole areas of the UK that do not accept housing benefit and claimants would be forced into less desirable locations and into poor quality housing. This means that there will be areas, where if you lose your job or become ill and become reliant on benefits, you will have to move town. There are currently around half a million people in the UK living in private sector rented accommodation and at risk from rent increases. Many are pensioners or those in low paid work. Any area with rising rents and rental demand is at risk.

One agency who has stopped accepting benefit tenants has stated rather controversially, that he prefers to rent to Eastern Europeans as they are less likely to default on rent than single mothers on benefits.

There is now only one in five private landlords which accept benefit claimants, less than half what it was a year or two back. And tenants in housing association accommodation and on benefits are already being hit by the so called bedroom tax, where their benefits are reduced if they are deemed to have a spare bedroom.

And there is another scandal brewing within the rental sector. There are now over four million people renting privately in the UK and another million more expected to follow suit in the next couple of years. Rents are constantly rising with landlords making very good returns and a lot of profit, while their tenants struggle to make up the rent each month. Rents are now rising at almost double the rate of inflation and wages, yet many landlords are failing to spend hardly any of the money on the houses they let out. Tenants are being threatened with eviction if they cannot pay the monthly rent or don’t agree to yearly rent rises.

It was once seen as a “London” problem, where the rent for a private sector luxury apartment was very expensive, but now renting is becoming the norm and over the last ten years there has been a 127% increase in the number of families with children now renting long term. The fastest growing group of renters are people between the ages of 35 and 44, often with children.

Countries like Germany, where the majority of the population rent, have rent controls in place. It is not seen as a dirty word, but is perfectly acceptable. Similar proposals need to be bought into the UK, as well as tougher sanctions on rogue landlords.

By Ruby

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