PEOPLE on low incomes are being pushed into the private rental sector due to a shortage of social housing - but many landlords have a 'no DSS' policy, a new study reveals.

Research by York academics reveals that low income households are increasingly reliant on renting in the private sector due to reduced investment in social housing and the sale of these homes via right-to-buy.

A new study, led by the University of York’s Centre for Housing Policy, highlights that housing supply to lower-income private renters is not sustainable.

Universal Credit is also having a big impact on landlords’ letting decisions, the study found.

A large number of ‘baby boomer’ landlords are ageing out of the market and not being replaced by younger landlords who are put off by diminished returns and tougher regulations.

Many landlords across England won’t let to ‘DSS’ claimants, but there are areas with high levels of housing benefit claims.

The five local authorities with the highest levels of housing benefit claims – Redcar & Cleveland, Blackpool, East Northamptonshire, Enfield and Tendring – all have a private rented sector where 55 per cent or more tenants receive housing benefit.

Around 28 per cent of all tenants receiving benefit live in a ‘benefit dominant’ local authority.

There are some locations where increases in the housing benefit rates combined with low house prices mean that landlords can achieve better returns by letting to benefit recipients rather than on the open market.

Some landlords are increasingly targeting the housing benefit claimants with the greatest additional needs, where it can be guaranteed that the rent is paid directly to the landlord.

Landlords see this as a way of reducing the risk of rent arrears.

The vast majority of lower-income letting takes place outside these housing benefit dominant markets. Here it was more likely to find that landlords were unhappy about the long delays with initial payments of housing benefit and problems with managing Universal Credit particularly where tenants fell into arrears.

Landlords felt it was easier simply to let to tenants who did not need help paying the rent.

As a consequence, there are concerns that the number of landlords willing to let to benefit recipients in these locations is falling.

There is evidence that landlords are withdrawing from letting generally, and from the housing benefit market specifically.

Other key findings include:

•Across the entire sector there was a fall of 30 per cent in the volume of buy-to-let mortgages between 2014/5 and 2018/19;

•Larger landlords and landlords letting to housing benefit claimants were much more likely to be planning to reduce their properties and/or exit the market than to increase their lettings.

•Landlords are generally dissatisfied with the weight of ‘regulatory burden’ which includes possible criminal convictions and fines of up to £30,000 for Housing Act contraventions.

•A withdrawal or restriction in the ability to serve s21 ‘no fault’ evictions meant that some landlords were worried that they would be unable to evict problematic tenants; there was evidence of landlords paying such tenants to leave;

•Landlords are reducing their housing benefit lettings and new landlords are less likely to let in this market: only 9 per cent of landlords in the market for three years or less said they currently let to people receiving housing benefit; for landlords letting for 11 or more years, this figure was 28 per cent.

Lead author of the project, Dr Julie Rugg said: “This research has really helped us understand how landlords at the lower end of the market pay for and manage their property.

“It’s a real concern that many good, professional landlords are no longer letting to housing benefit claimants because of the way that Universal Credit is administered."

Dr Rugg added: “Letting property looks altogether different to landlords now: it looks like a much riskier proposition, delivering a lower level of return and with a lot more hassle.

“As one landlord said to me, ‘stocks and shares may not deliver the same level of return, but they don’t phone me on a Sunday morning because the boiler’s bust'."