Benefit Cuts Threaten Buy-To-Let Landlord's Income.

Buy-to-let landlords face growing financial pressure as the government’s benefit cuts threaten rental income in some of Britain’s priciest areas.Swaths of outer London and the south coast will be hit by the £23,000-a-year cap on benefit payments which the government is committed to introducing in this session of parliament, according to data modelling by the FT.These areas are relatively affordable for the capital’s commuters but a high proportion of households receive housing benefit because of their low incomes. One in four English private sector tenants now claims housing benefit, a rise of nearly 90 per cent in the past six years.The government plans to roll this and other benefits into a single payment, called universal credit, which will be capped for out-of-work households to ensure that people are always better off in a job than on welfare. But this will make it harder for some tenants to afford their rent.Paul Shamplina, founder of Landlord Action which helps landlords deal with rent arrears and other tenancy problems, said he had seen “a lot of landlords in London and the southeast exiting the market” in the past 18 months, as the benefit cuts — including a cap on total benefits already imposed in the last government — make it harder to find tenants who can afford to pay their rents. Landlords are also facing rising problems with tenants subletting rooms in their properties to benefit claimants who can no longer afford a home of their own, Mr Shamplina said.“Especially in London because rents are so high, tenants are being evicted and [moving to] places like Birmingham and Slough,” he said. “It is only going to get tougher for landlords.”...

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