Almost two years ago the Centre for Homelessness Impact (CHI) commissioned BIT to identify ways to increase the willingness of landlords to rent to people receiving housing benefits. We have worked with CHI and the National Residential Landlord Association (NRLA) to test ways to encourage private landlords to rent to people receiving Universal Credit (UC).
More urgent than ever
During the COVID-19 pandemic the number of people claiming UC has almost doubled (there were 4.9 million households receiving UC in November 2020, this is an increase of 2.2 million since March 2020). There is a growing need to establish effective ways to encourage private landlords to let properties to those on Universal Credit, both from a property owner and renter point of view.
To address the dearth of evidence in this space, we ran two online randomised controlled trials, using our experiment platform Predictiv, with nearly 2,700 landlords from the NRLA. We looked at the following questions:
- Does disclosing additional information about the tenant increase landlord willingness to continue with the application of someone receiving UC?
- What kind of Local Authority (LA) incentives or support programmes are most effective at increasing landlord willingness to rent to someone receiving UC?
The primary outcome for this trial was the self-reported likelihood of landlords continuing with the tenant’s application process, measured on a 7-point Likert scale (from very likely to very unlikely).
Overall, we average willingness to rent to people receiving UC was low (on average ‘somewhat unlikely’ across interventions). Average willingness to rent to someone receiving UC did not go above ‘neutral’ in any of our scenarios.
The results: Trial 1
Does providing extra information encourage landlords to rent to people who receive Universal Credit? In short, no. In this trial, landlords were presented with a scenario in which a prospective tenant was applying for a one bedroom property. The property’s rent was equal to the housing benefit payment that the prospective tenant was receiving so there should not have been any concerns about how the tenant would pay the sum owed. Landlords were randomly sorted in four groups where they were presented a similar email tenancy application but with different attachments as outlined below:
- Control: No attachment
- Pre-tenancy training: Certificate of completion & schedule for a tenancy skills programme
- Budget planner: Table of income & expenditure
- Alternative payment arrangement (APA) leaflet: Information about APA (circumstances where housing benefit can be transferred directly to the landlord instead of being paid as part of the tenant’s lump-sum UC payment)
None of our intervention arms significantly increased landlord willingness to rent to a person receiving UC.
The results: Trial 2
Do incentives encourage landlords to rent to someone receiving UC? Probably not. For this trial we tested whether offering incentives to the landlord encouraged them to rent to a prospective tenant who is being supported by a local authority housing team. Incentives included:
- £1000 cash upfront
- Rent guarantee
- Deposit bond
- Landlord liaison officer
We chose these incentives because they’re quite commonly offered by local authorities across England. Providing cash upfront and providing a rent guarantee were the most effective at increasing the likelihood of accepting a tenant receiving UC at below-market rent. Offering cash upfront or a rent guarantee resulted in greater increases in landlords’ likelihood to accept the offer (0.8 points on 1-7 scale) compared to offering a deposit bond or a landlord liaison officer (0.3 points). However, even with the two most effective incentives, landlords on the whole were not very inclined to accept the offers.
At BIT we are always trying to improve outcomes. On the face of it these trials haven’t been very successful at that aim. However we think this work is extremely valuable for a number of reasons:
- CHI was set up to help build an evidence base for the most effective ways to reduce homelessness. One of the first things they did was to create evidence and gap maps which highlighted the lack of quantitative evidence from the UK. We believe this study is the first behavioural research on homelessness and so is an important addition to the research in this area.
- This study suggests that there is still more work to do to reduce the barriers for people receiving UC to find a private rented home. This is likely to include larger policy changes. For example in England, UC is paid monthly directly to the claimant instead of offering flexibility to have more regular payments or have payments made directly to their landlord. Universal Credit Scottish choices enables eligible claimants in Scotland to choose to be paid twice monthly and/or have the housing costs in their award paid directly to their landlord in both the private and social rented sectors. This is likely to make it easier for people to manage their budget and be less likely to miss rent payments.