The vast majority of UK landlords will not accept new tenants if their rent is being paid by a local authority, according to a new survey by Online Lettings Agents.

Just 18 per cent of respondents said they would consider an LHA tenant.

Eleanor Carroll, director of Online Lettings Agents, said the findings revealed that many of the UK’s 1.4 million private landlords are wary of letting to social housing claimants. She also said mortgage lenders and insurers were similarly cautious about their clients’ properties being let to LHA tenants.

According to the survey, landlords prefer private tenants because they are viewed as less likely to fall into rent arrears, and will take better care of the property.

In addition, changes to the welfare system have put landlords off LHA tenants. Limits on how much rent can be paid through an LHA, combined with the new universal credits system are the key concerns.

Carroll said that since rental caps are regionally set, the difference between the LHA top rate and average private rents are huge in some areas, and are similar in others. LHA rents are based on the cheapest third of all rents in a region.

The National Landlords Association’s figures back up OLA’s findings. In 2010 46 per cent of new tenants received some kind of benefit, but in 2012 this had dropped to just 22 per cent.

Are you one of our buy to let insurance customers with a view on this topic? Are you more or less inclined to take on those receiving benefits?