The number of landlords letting to tenants in receipt of local housing allowance (LHA) has fallen to 27%, a 7% reduction since quarter one this year, according to latest research from the National Landlords Association (NLA).

The research also found that 38% of all landlords are concerned about the impact of Universal Credit and 51% of landlords are actively choosing not to let to LHA recipients or other benefit claimants. The reluctance to let to this market is strongest amongst the smaller landlords, with six in 10 ruling out letting to this tenant type.

In contrast, the most popular tenant types are families with young children (51% of landlords let to this market) and young couples (51% of landlords also let to this market).

Carolyn Uphill, chairman of the NLA, said: “Our research highlights how worried landlords are about the impact of Universal Credit and that they are choosing to withdraw from the local housing allowance market.

“This concern is understandable, particularly with the uncertainty that the changes to the benefit system bring. Quite simply, they are worried the rent won’t be paid and that they will not have the system of direct payment to fall back on.

“However, the Government relies on the private-rented sector to support the provision of housing for those in receipt of benefits so it needs to act quickly to restore landlords’ confidence, showing it grasps the practicalities of renting.

“Renting is a business and landlords must balance their needs with an understanding of the pressures experienced by their tenants. It is essential that they work with tenants in receipt of housing support to ensure they are aware of the forthcoming changes and are seeking advice on budgeting for monthly payments.”