Lettings agents have defended the use of “No DSS” phrases in property listings, claiming landlords are often following instructions from their mortgage lenders or insurer.
MPs on the Work and Pensions Committee heard evidence from agents, banks and tenants yesterday as part of an inquiry into discrimination against benefit claimants in the housing sector.
Speaking to the committee, Greg Beales, director of communications, policy and campaigns for Shelter, said that including terminology such as “No DSS” or “no housing benefit tenants” in listings was a form of indirect discrimination under the Equality Act.
He claimed that mystery shopping among agents by the charity had found landlords were being warned that housing benefit tenants were more likely to trash a property.
But directors at OpenRent, LSL and Hunters all told MPs that it was often landlords requesting the clause in the listings.
Adam Hyslop, founder of OpenRent, said landlords mainly want to include these terms due to contractual reasons such as their mortgage provider or insurer not covering housing benefit tenants, or just due to a preconception of how those on benefits behave.
He told MPs: “It is difficult for tenants to find property, and one of the things that exacerbates that is people applying for properties where they don’t stand a chance of being accepted.
“If a tenant comes to us, it is better to be clear with the no housing benefit requirement.
“To the best of our understanding it is not illegal.”
Helen Buck, executive director of estate agency for LSL, said that it does not allow these terms in adverts.
However, she was then shocked when several listings from her own business were read out to her that said housing benefit tenants were not allowed.
She said she would go back and look at the listings, adding: “We know some landlords have a policy that they cannot accept a tenant on housing benefit, or don’t wish to, and that’s where we can play a role to help them understand the system.
“We have relationships with local housing teams to help address issues.”
Glynis Frew, chief executive of Hunters, told MPs: “We don’t have a blanket policy of turning away housing benefit tenants.
“When we started to investigate it there were a number of adverts that were cut and pasted and can be easily eradicated.
“Of 1,900 properties, fewer than 19 still have this phrase, and we will pursue those.
“For a number of landlords it is the mortgage restrictions. It is not our place as a lettings agent to say you can abide by that rule but not by that one. They have restrictions on mortgages and insurance.”
MPs also asked whether advertising and policies that excluded housing benefit tenants should be made illegal.
Hyslop warned this could make it harder to advertise properties and said there first needs to be a better understanding of why landlords are reluctant to rent to housing benefit tenants.
He said there would be no issue if mortgage lenders and insurers saw income from housing benefit as on a par with employment income.
Buck said the housing benefit system also needs to be looked at to assess why landlords are reluctant to let in this sector.
She said reasons include the way Universal Credit is paid in arrears and no longer directly to the landlord, making it harder to keep up with mortgage repayments.
Frew added that she would support a code of practice that called for fairness in listings but said this would also have to apply to landlords not using an agent.
The committee also heard from representatives of Natwest, the Co-operative Bank and Nationwide, who all said they have now scrapped historic policies that banned renting to housing benefit tenants.
Most on benefits have no chance of being able to afford a property at market rent due to cuts.
This will bring false hope to tenants and just waste the agent and tenants time.
If you get a rogue tenant who does not pay rent and trashes the place it would be bear on impossible to get repaid. So this presents a massive risk.
If they government guaranteed to refund the landlord lost rent and damage money then this would eliminate the problem.
They would need a large pot of money but it would open the government’s eyes to the damage and lost rent landlords are suffering
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Most people on benefits are actually working.
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And that means?
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Yes agree many do.
I think there is something wrg when big employers cn get away with paying very low wages that UC wage topup is required by the State. Big companies are being subsided. Smaller companies might need this help.
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Well if pathetic successive governments had built a million social houses we wouldn’t even be having this conversation.
They expect PRS to act as social landlords.
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it’s very true that their needs to be a review of why Landlords frequently don’t want Housing Benefit tenants.
There is restrictions on Mortgages / insurance etc, but also there is the liability that if benefits money is claimed erroneously / illegally then the Landlord / agent has to refund that money due to it being fraudulently gained. Right from the outset you are taking on a differerent kind of liability and I’m sure none of us could guarantee that money being claimed is in fact legally due to that person.
That is in addition to benefit money being paid in arrears / higher instance of tenants on benefits not loking after proeprties …………….
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Two things: one is that I just checked with the referencing company I use (Legal for Landlords) who will not take universal credit into account.
The other: is it easier just to put the affordability criteria in the body of the advert?
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How about the fact that some people who work hard and pay all sorts of taxes just cannot accept those taxes being used in this way? Yes we do see genuine cases but we also see a fair proportion of non genuine cases where folk just expect the state to support them! If a perfectly able couple in their 30s walk in looking for a 2 bedroom house and asking if we accept housing benefit, I have to admit that my first thought is why? Why not aim lower, we started in a room in a house? Why not try and earn more money, we worked 2 jobs each whilst saving?
The trouble as I see it is a generation (or 2) that feel they should be entitled even though they have never contributed!
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Its not a question of affordability, thats just an excuse. The shameful fact is that benefit claimants have very little to lose so simply have little respect for anything. If you are socially irresponsible then you are not going to look after someones elses property if you only have 5 weeks deposit to lose. If you want to couple that with irregular rental payments then you have a perfect storm.
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As a landlord i have housing benefit tenants in my own property that have been long term and no problem, as an agent i cant say the same over the years most of the issues we have had are with benefit claimants not paying rent due or not looking after the properties in a fit and proper way ,this isnt DSS bashing as private tenants do exactly the same but their is a higher risk.
But the 5 weeks deposit lost isnt the full story a lot of these claimants are on a bond scheme so the landlord/ agent doesnt even get a deposit just a promise from the local authority that they will make good if there is a problem , and lets be fair who trusts a local authority, that advises a tenant with a legitimate section 21 to stay put until a balif turns up??? local authorities are the root of the problem the whole system needs changing.
And with the government thinking of scrapping section 21 all together how would one remove these tenants if they were to default,
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“He claimed that mystery shopping among agents by the charity had found landlords were being warned that housing benefit tenants were more likely to trash a property.”
Sadly, that is a statistical fact for us. It would be an even more worrying statistic if you calculate that figure as a proportion of the number of tenants that we have that are on DSS.
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Just demand homeowner working guarantors who accept full references and credit searching on properties where there is some affordability on DSS. The government has lost the plot chasing dss and rent flake votes , just endless populist policies which is incredible to think the majority of these people are being carried by the tax payers and the likes of landlords but because of their numbers they are more important, all this clearly evident that not one thing ever comes out to protect landlords rom rogue tenants
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I currently have a HB tenant who has gone into arrears. We issued a section 8, have been to court and got possession. The council have now informed the tenant to stay put in the property until we get a bailiff order as they do not consider the tenant a priority until this happens. (Due to them having no housing stock). Maybe if the councils worked with us and as soon as a section 8 was issued, with proof of the arrears, then they make the tenants a priority to be rehoused, this might mean more landlords would be willing to accept HB tenants. Together with paying in arrears, higher insurance costs and more wear and tear on your property I cannot see why any landlord under the current system would want HB tenants.
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I Dont think tenants who trash property should be given Council social housing until they have paid for damage. We should not be rewarding this behaviour. I have many decent hardworking tenants who are dismayed they are not eligible but a tenant causing damage is.
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In our area, the council will not give social housing to anyone who has received a section 8 notice for arrears, especially when they are already in receipt of HB/DSS/UC, as they say they have made themselves intentionally homeless.
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The left/charities/media/Shelter/public don’t want us to take DSS! Every day there is public comment about how we’re all ‘subsidised’ and ‘leeching off the state’ for taking benefits payments! (Most commentators seem not to understand that the benefit is for the tenant, not the landlord!). ‘Oh, oh, ohhhh!!!!’ they cry as they bemoan £9bn going to private landlords (highly taxable, and for 988,000 houses, let’s not forget). Shelter are unbearable hypocrites on this, bullying agents and wishing landlords out of the sector, then decrying the situation when they evict and sell. They’re the real leeches – sucking up £51m of income and donations to waste frivolously on anti-agent campaigns. If they’re that worried about it, they could house some DSS themselves! (Oh wait… they don’t take them…!).
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With all its wealth Shelter could offer rent guarantees for all these benefit tenants, after all they are so little risk that Shelter would rarely be called upon to honour the guarantee.
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It is essential that Landlords are, like lenders and insurers able to ‘risk profile’ potential tenants. This profile of course includes previous history and affordability.
Whether removing ‘No DSS’, landlords will simply use the affordability calculator to decline this type of tenant.
The way forward to improve the chances of Landlords accepting DSS is to ensure that the rent is paid directly and in advance to the Landlords. This eliminate half of the concerns of Landlords – being paid on time. Ensuring the tenant maintains the property will be based on experience and referencing.
The Government need to stop listening to the likes of Shelter and listen to the Professionals that deal with this day in/day out.
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Been in this industry 26 years, seen some massive changes. It used to be easier for tenants to live a life on benefits and pay the rent, these days it is less easy (Which is a good thing, right!?) It would be very unfair to say that all tenants on benefits are bad tenants, but having dealt with 1000’s of tenancies I am frustrated to admit that nearly all of our worst problems have been when I have been dealing with tenants on benefits. What is sad about this, is most of issues were avoidable and caused through a lack of communication on their part or just plain and simple malicious damage. We often get asked by landlords for advice when they are venturing into this industry and my advice will always be to try and avoid benefits, with the exception on pensioners and disabled people. It’s just an unnecessary risk. Whilst I realise this advice means we might lose out on some good people, we are just playing the %’s Which is exactly why mortgage companies and insurers give the same advice.
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“. . . try and avoid benefits, with the exception on pensioners and disabled people.”
I housed a disabled tenant on benefits and made copious very expensive adaptations. One day he left and so did all the disabled artefacts, including the electric shower.
I housed a pensioner, nice old fellow, who certified in writing that he had no problems with alcohol or drugs. The same evening I found him eating his takeaway off the staircase floor, drunk out of his mind and calling me a useless piece of s**t.
I regret that benefit tenants are troublesome, so my advice is to avoid tenants whose only income is from benefits. Working tenants who claim some government support are generally not so much of a problem, at least they sleep at night.
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The article above states “Greg Beales, director of communications, policy and campaigns for Shelter, said that including terminology such as “No DSS” or “no housing benefit tenants” in listings was a form of indirect discrimination under the Equality Act.”
That statement is not true, and Beales did not make it, according to the official transcript. What he said was “In terms of legality, we think that this practice of no DSS—advertising the practice of excluding people simply because they are receiving benefits—breaches the indirect discrimination components of the Equality Act.”
And “we are in the process of bringing a series of cases through the courts. We have already brought some that have settled with admission of liability—with an admission of discrimination. We feel that our legal position is quite clear: people who are pursuing these practices and policies are not complying with their legal obligations.”
Beales thinks, feels and claims that it is indirect discrimination but it will take a court case to prove it. But he cannot quite get one to judgment. Funny, that. If agents really have settled out of court they may have done so to avoid racking up lawyers’ fees.
Beales is a former Downing Street adviser to Prime Ministers Gordon Brown and Tony Blair, and formerly Director of Strategy and Planning for the Labour Party.
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I think there is something huge that is missing from this argument (but not read all posts, sorry). The main reason why as an office i would actively discourage a Landlord from accepting money from people on any form of housing benefit, comes simply down to possession.
Councils will not act for the tenants on benefits until they have been legally evicted from the home. That can take many months, add to the landlord costs and stress and in many cases leads to more arrears as Universal credit does not pay out the same amount as people used to receive.
Until councils actually work with landlords rather than against then this will continue.
I did read somewhere about people on benefits are more likely to trash a home – i have to say in my experience that is false, it comes from the people themselves not what “class” they are part of!
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” or just due to a preconception of how those on benefits behave” unfortunately, this is largely true, or certainly is around my area. It only takes one drive through any modern development where there is social housing and they stand out like a sore thumb – overflowing bins, dented front doors, uncut gardens; you can only imagine the inside is a reflection of the outside.
Until there are better measures in place to protect landlords I would always advise the full time employment tenant with 30+ x the monthly rent as an income over a housing benefit tenant, it’s simply logical.
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