Are Over 60% Of Sunderland Private Tenants Really On Housing Benefit???

I’m often asked “Who is your typical Sunderland Tenant?” often by people who don’t know the modern day Private Rented Sector and therefore assume that Tenants are either exclusively students or on Housing Benefit… 

In reality Tenants tend to fall into several groups...20 something professionals; young and middle aged families; corporate Tenants; students; older singles/couples and Housing Benefit claimants – and they all come with different needs and wants

So choosing who best suits your Sunderland property – and steering clear of bad Tenants – is a big factor in making property investment a success

I’m often asked by Landlords & novice investors looking to Sunderland whether they should accept Tenants on Housing Benefit? Often they think they have little choice but to do so 

It may come as a shock to the Landlords of Sunderland to learn that based on the latest DWP statistics, there are 8,250 Housing Benefit recipients in the Private Rented Sector in the Sunderland City Council area - this equates to 63% of the 13,077 private rented properties in Sunderland

Knowing the Sunderland property market as well as I do this still came as a big shock, I expected the Sunderland figure to be higher than in more prosperous areas (for example the Housing Benefit figure is 29% for Chelmsford and 36% in Derby) and infact I expected it to be a fair bit higher than the national average (which is 39.2%)

When you look at this again it does make quite startling reading (well it does to me anyway!) that the national average has around 40% of all Tenants receiving some form of Housing Benefit 

This might make the Sunderland figure a little easier to take but even so I didn’t expect the Sunderland figure to be quite so high!

It’s worth noting that this figure does include those who are working and are receiving some form of Housing Benefit top up, it would be wrong to assume this Housing Benefit figure equates to only 'The Unemployed'

I know many Landlords have suffered late rent payments with Tenants on Housing Benefits, especially since 2008, when local authorities started paying Housing Benefit to Tenants rather than directly to the Landlords, but you can’t ignore them given Housing Benefit Tenants make up more than half of the Sunderland rental population!

My opinion is that the final choice of accepting such Tenants has to be the Landlords, some Landlords see the fact that Housing Benefit tenants often stay a lot longer than working tenants as a major positive to outweigh any negatives

Whilst you can’t tar every Housing Benefit Tenant with the same brush, for purely commercial reasoning I would always advise Landlords that if a property is of a suitable standard to attract a working Tenant, then working Tenants would always be preferable

...and if a property is not to a standard that will attract a working tenant, why isn't it??

Now, let us look at the occupations of Sunderland Tenants, which makes even more fascinating reading

Of the 13,077 privately rented properties in the Sunderland area, 64.6% of Head Tenants (the head Tenant being classified as the head of the household) are in employment (the other 35.4% of rental property head Tenants either being retired, long term sick, students or job seekers)

This does fit with the above suggestion that in an area such as Sunderland with relatively low average wages (the average Sunderland gross weekly pay is £455.90 compared to the national average of £529.60 per week) there may be proportionally more working households requiring Housing Benefit ‘top ups’ to make ends meet

Splitting those 8,447 Head Tenants down into their relevant professions
• 2,433 (28.8%) of them are Senior Managerial, Professional or Technical
• 2,272 (26.4%) are in Administrative/Secretarial occupations or Skilled Trades
• 2,000 (23.6%) are in Caring, Leisure, Sales and Customer Service Occupations
• 1,757 (20.8%) are in Process, Plant and Machinery Operatives/Elementary Occupations

Given we deal exclusively with working tenants this is fascinating data to back up what we have always known anecdotally (but until I did my research, never had anything to back it up with) that Sunderland has higher than average proportion of the renting population coming from admin/leisure/customer service roles and those employed in skilled trades – which I’d suspect very much mirrors the labour market profile for Sunderland vs the national average 

Maybe in future articles, I will look deeper into the corporate Tenant market, young and middle aged families, students and older persons rental markets.... 

In the meantime, if you want more news, views and commentary about the Sunderland property market, there are many similar articles like this on the Sunderland Property Blog or give me a call on 0191 567 8577 or email neil.whitfield@belvoirlettings.com