Younger people will struggle to secure rented accommodation as landlords cut back on renting to under-35s.

While many landlords are willing to rent to this age group, nearly a third are changing their letting policies, new research commissioned by the Residential Landlords Association (RLA) and undertaken by Sheffield Hallam University has found.

The survey of nearly 2,000 mostly private landlords found that 79 per cent of landlords who let to under-35s are concerned about the higher risk of rent arrears.

And two-thirds of landlords are unwilling to let to under-35s on Housing Benefit or Universal Credit, while 44 per cent won't to let to students.

Of the landlords whose businesses have been affected by the extension of the Shared Accommodation Rate to all under 35s in 2012, 68 per cent had reduced or stopped letting to under-35s on benefits.

And nearly 80 per cent of landlords who continued to let to Housing Benefit or Universal Credit claimants have begun using safeguards, like guarantors or asking for direct payment.

When asked what would encourage them to increase lettings to under-35s, landlords called for a reversal of recent tax increases, providing tax relief for longer tenancies and the better administration, and direct payment to the landlord, of housing costs under welfare payments.

They would also like to see bond or rent deposit schemes under which organisations such as local authorities and charities offer loans to tenants to cover the cost of deposits.

Alan Ward, Chair of the RLA, said: “This research suggests that landlords are moving away from accommodating under-35s, especially those who are on benefit, out of concern that they will not get paid. The report notes that landlords are not necessarily looking for higher rents or increased yields from their properties. Instead, the emphasis is on reducing risk, particularly in relation to rent arrears and the administration of welfare payments.

“We have already held constructive talks with the Government about this and we will keep the situation under review, but there is a need for policymakers to engage further with landlords to consider what more action can be taken to address this decline. Without this many under-35s are likely to struggle to access any accommodation.”

The good news for landlords is that thanks to the work of the RLA and other campaigners, these issues are starting to be more widely recognised. In the last month, Ian Duncan Smith has already talked about the need for a review of buy-to-let tax changes, and the government has promised to look at the effect of Universal Credit on landlords.

“We know times are tough for landlords,” adds Alex Huntley, Head of Operations from Simple Landlords Insurance. “But in the right area and for the right property, renting to both students and families on benefits could could still be a valid strategy. Look for guarantors, interview your tenants in person, and insure for the worst case scenario. Conduct regular inspections to keep track of the condition of your property, and work with your tenants on a payment plan. Something as simple as changing your rent due date to coincide with UC payments could help reduce the risk of your tenant falling into arrears.”