One of Britain's best-known landlords, who owns nearly 1,000 homes, has sent out 200 eviction notices

One of Britain's best-known landlords has issued eviction notices to every tenant who is on welfare, and told letting agents that he will not accept any more applicants who need housing benefit.

Fergus Wilson, who with his wife Judith owns nearly 1,000 properties around the Ashford area of Kent, has sent the eviction notices to 200 tenants, saying he prefers eastern European migrants who default much less frequently than single mums on welfare. He says the move is purely an economic decision and points out that private landlords are running a business.

"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."

A key factor for Wilson and other landlords is that it is impossible to obtain rent guarantee insurance for a tenant on housing benefit. This type of insurance is sold to landlords and is designed to cover the rent if the tenant stops paying for any reason.

Another issue Wilson raises is the number of tenancy applications landlords receive for each property.

"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.

"Single mothers on benefits have been displaced to the bottom of the pile; sympathy for this group is disappearing. There aren't enough places for people to live."

Dan Wilson Craw, a spokesman for campaign group Priced Out, says he is dismayed to hear Wilson's announcement: "Evicting tenants because you're suddenly upset about new government policies is unbelievably heartless, and could lead to more people deciding not to claim benefit for fear of losing their home, and sinking further into poverty," he said, "This is just one symptom of a wider housing market that is simply not working in the consumer's interests. The instability and poor conditions that private tenants have to deal with would not be tolerated in any other market."

Wilson's decision comes after figures from the National Landlords' Association published in December, which showed that the number of private landlords letting to people on benefits has halved to just one in five.

Problems for tenants on benefits seem likely to get worse when universal credit is introduced. Under the scheme, six means-tested benefits, including housing benefit, will be combined into one monthly payment. Tenants on benefits will need to budget and pay the rent to their landlord themselves.

Universal credit started to be introduced in April 2013 and it is predicted that all claimants will be moved to the scheme by 2017.

The Wilsons shot to prominence in 2006 when it was revealed that they had built up Britain's biggest buy-to-let empire, sometimes snapping up a property every day in the early part of the decade.

Wilson is not the first large-scale landlord to raise concerns about low-income tenants. Last month Kevin Green, a landlord with more than 700 properties in Wales, said he may stop letting to people on welfare.