A husband and wife team who own around 1000 buy-to-let properties are reported to have told letting agents they will not take any more applicants on housing benefit.
According to The Guardian, Fergus and Judith Wilson, whose property empire is centred around the Ashford area of Kent, have issued eviction notices to every tenant who is on welfare.
"Rents have gone north, and benefit levels south," he said.
"The gap is such that I have taken the decision to withdraw from taking tenants on housing benefit. From what I can gather just about all other landlords have done the same. Our situation is that not one of our working tenants is in arrears – all those in arrears are on housing benefit."
Difficulties getting rent guarantee insurance for tenants on housing benefit is understood to be one of the factors behind the decision.
Fergus Wilson said: "Tenants on benefits are competing with eastern Europeans who came to the UK in 2005 and have built up a good enough credit record to rent privately. We've found them to be a good category of tenant who don't default on the rent. With tenants on benefits the number of defaulters outnumbers the ones who pay on time," he said.