Higher housing benefit won’t remove letting risks. Here’s what landlords still face.

October 2026 Swift Capital® 7 min read

On the surface, proposals to increase housing support look like good news for landlords. Housing benefit would go further as rents rise, making tenancies more affordable and reducing rent arrears.

But would it remove the risks landlords actually face? Possession proceedings, delays, legal and professional costs, lost rent, the stress of a difficult tenant and the condition the property comes back in. We’re not convinced. These risks can arise in any tenancy, whether the tenant receives benefits or not.

What’s the current situation?

Local Housing Allowance (LHA) caps the housing support private tenants can get through Universal Credit or Housing Benefit. Rates depend on the area and bedroom entitlement, and for 2026 to 2027 they remain frozen at April 2024 levels.

So if you raise the rent, a tenant on Universal Credit won’t necessarily see their payment go up. The increase simply widens the shortfall they have to find themselves.

Landlords can already ask for rent to be paid to them direct, but that changes who receives the money, not how much there is.

What are the new proposals?

The Resolution Foundation proposes restoring LHA to the 30th percentile of local rents from April 2027 (the point where 30% of local rents are cheaper), then raising it every year in line with rents. It estimates the cost at around £2 billion a year by 2029 to 2030.

This is a proposal, not policy. It could reduce shortfalls and help sustain tenancies, but it won’t necessarily cover every tenant’s rent.

What risks remain for landlords?

Risk 1: Getting possession

Higher support may mean fewer cases reach court. It doesn’t make the process quicker or cheaper when they do.

Since May 1st 2026, landlords can no longer serve Section 21 notices. You must first serve a Section 8 notice (Form 3A) relying on a statutory ground for possession, such as rent arrears, breach of tenancy, anti-social behaviour, or selling or moving in.

When the notice expires:

Your tenant can legally stay. The notice doesn’t end their right to live there.
You can’t take matters into your own hands. Changing the locks, cutting off utilities or removing the tenant yourself is a criminal offence. You need a possession order from the county court, then a warrant or writ.
Your tenant can defend the claim. Free advice is available from organisations like the Housing Loss Prevention Advice Service and Shelter and they know where landlords’ cases are weak.
Only a bailiff can evict. A county court bailiff or High Court Enforcement Officer carries out the eviction, adding weeks or months. Occasionally the police need to attend.

Rent arrears (Grounds 8, 10 and 11)

Mandatory Ground 8 generally requires at least three months’ unpaid rent both when notice is served and at the hearing. Arrears caused by delayed Universal Credit payments don’t count.

Payments before the hearing

Tenants often let arrears build, then pay them down just before the hearing, from their own funds or with help from the council’s Crisis and Resilience Fund. That can take the claim below the Ground 8 threshold. Grounds 10 and 11 remain, but the court must find possession reasonable and may adjourn or suspend the order. Then the arrears build again, and the cycle repeats, with the landlord paying costs each time.

Defective paperwork

Invalid notices, missing evidence or a deposit protection failure can delay or defeat a claim, or force you to withdraw, leaving you paying your own costs and the tenant’s. Take specialist advice before you start.

Rehousing and “intentionally homeless”

Councils must help tenants threatened with homelessness, but not necessarily straight away. Tenants who leave before a warrant or writ is issued also risk being found “intentionally homeless”, a legal decision that can cost them housing help (Homelessness Code of Guidance, Chapter 9).

Government guidance says tenants shouldn’t be expected to wait for bailiffs, and the Ombudsman has found fault with a council that tells them to. Even so, in our experience tenants are almost always advised to stay put, including those who would rather leave quietly than face court.

Risk 2: Legal costs

Taking a case through to bailiffs with a solicitor typically costs several thousands of pounds. Contested cases can cost far more. One landlord we dealt with recently faced a bill of around £30,000 after starting proceedings on poor advice. Meanwhile, mortgage, service charges, repairs and compliance costs keep running.

Withdrawing isn’t cheap either. Under Civil Procedure Rule 38.6, a landlord who discontinues generally pays the tenant’s costs up to that point. Pressing on with a weak claim only adds to the loss, so get an early specialist review.

And winning doesn’t guarantee payment. If the tenant has little income or no assets, recovering arrears and costs may be uneconomic or limited to small installments.

Risk 3: A stressful tenancy

Not every problem is about rent.

Access. You must meet your gas and electrical safety obligations. If access is refused, record your reasonable attempts and take advice. Don’t force entry.
Disrepair claims. Fix genuine defects promptly. Disputed claims are costly to answer, and a successful counterclaim can reduce the arrears you rely on for possession.
Stress. Months of letters, hearings and uncertainty take their toll, especially on landlords with one or two properties. Many vendors tell us it was the strain, more than the money, that made them decide to sell.

Risk 4: Property condition

A recovered property may need clearing, cleaning, redecorating or repairs before it can be relet or sold, and damage is sometimes deliberate. Insurance, utilities and Council Tax still have to be paid while the work is done. Claims must allow for fair wear and tear, and the deposit may cover only part of the damage and arrears.

What does this mean for landlords?

Higher support could help some tenancies, but it won’t remove these risks. Before deciding whether to keep letting or sell, compare your realistic net income after borrowing, arrears, legal, letting, repair, compliance and tax costs and empty periods, plus your time. If that income plus capital growth still gives an acceptable return, keeping may make sense. If not, it may be time to sell.

Selling a tenanted property

Selling with the tenant in place means you don’t need to obtain vacant possession, refurbish or resolve existing issues first. The price will reflect the tenancy and the property’s condition.

Selling to an investor or at auction can be difficult when there are disputes, disrepair claims or live proceedings, and usually takes 10 to 12 weeks for preparation, marketing and completion, with no guarantee of a sale.

Do any of these risks resonate with you?

Swift Capital® buys tenanted residential property across the UK that others can’t or won’t, including properties with live possession proceedings, benefit-supported tenants, sitting tenants, rent arrears, disputes or disrepair.

We often buy without an internal inspection or contacting the tenant, and without needing vacant possession or existing issues resolved first. With your solicitor’s help, exchange is possible in as little as 7 to 14 days, often within 24 hours of the paperwork being agreed.

For nearly 50 years, landlords and property professionals have trusted us for a confidential, straightforward sale that delivers certainty and peace of mind.

Thinking of selling your tenanted property? Talk to Swift Capital® in complete confidence.

0800 035 0202 | enquiries@swiftcapital.co.uk | www.swiftcapital.co.uk

Sources

General information only, not legal advice. Every situation is different, so take independent legal advice before starting or continuing possession proceedings. The possession and homelessness discussion relates to England; rules differ elsewhere in the UK.