Rental adverts which ban tenants on benefits must end, the Government has said.
It is to bring pressure on the industry, including agents, landlords and the portals, to clamp down on blanket exclusions in adverts, with a view to stopping them altogether.
It will also be meeting with tenant groups and buy-to-let mortgage lenders.
The move follows campaigning by Shelter, including ‘naming and shaming’ agents, and threats to bring legal action.
Last year it claimed that in six chains, a total of 149 letting agent branches banned housing benefit tenants.
However, a parliamentary briefing paper in April last year advised that “refusing to let to benefit claimants is unlikely to amount to direct discrimination” because the receipt of benefits is not a protected characteristic under the Equality Act 2010. However, it could be indirect discrimination.
https://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN07008
Lenders, and insurers, often stipulate that private rental property must not be let to tenants on benefits, although the NatWest has just said it is lifting restrictions.
Both Zoopla and Rightmove have previously written to agents encouraging them not to place ads with blanket bans on people claiming benefits.
Minister for housing and homelessness Heather Wheeler said: “I will be meeting key stakeholders to tackle the practice of ‘No DSS’, to underline the need for immediate change.”
Justin Tomlinson, minister for family support, housing and child maintenance, said: “Everyone should have the same opportunity when looking for a home, regardless of whether they are in receipt of benefits.”
ARLA chief executive David Cox said: “The whole system of Universal Credit needs to be reviewed. The main reason landlords are reluctant to let to those on housing benefit is systemic failures of the system itself.
“For example, tenants are always in rent arrears because benefits are paid in arrears rather than in advance, and there’s the possibility that should a tenant make a mistake in their application for Universal Credit, the Department for Work and Pensions could ask the landlord to repay rent many months later – what is known as clawbacks.”
John Stewart, policy manager for the Residential Landlords Association, said: “Landlords should not refuse someone solely because they are on benefits, and should consider prospective tenants on a case by case basis.
“But with growing numbers of benefit claimants now reliant on the private rented sector, we need to do more to give tenants and landlords greater confidence in the benefits system.
“This means giving all tenants the right to choose if they want to have the housing element of Universal Credit paid directly to their landlord; working with bank lenders to remove mortgage terms that prevent landlords renting to benefit claimants; and ending the Local Housing Allowance freeze which has meant benefits bear little resemblance to rents.”
At the same time the Government has also announced that people at risk of being homeless are to be helped into private tenancies with taxpayers’ cash.
A pot of £19.5m is being distributed to 54 projects across England.
Local councils will be given money to support vulnerable people by paying deposits or putting down the first month’s rent.
Wheeler said: “This funding will make a huge difference in opening up the private rented sector to people who need it and give them the chance to rebuild their lives.”
ARLA downplayed the move, with Cox saying: “We welcome any additional funding to help support low income and vulnerable people into the private rented sector.
“However, this funding is only a drop in the ocean in terms of what is really needed.
“The freeze on Local Housing Allowance is having a significant impact on its recipients’ ability to obtain good quality, well managed accommodation.”
Comments (13)
I find it staggering that the government can continue to threaten to impose legislation on an industry that they are hammering left right and centre without looking first at what they could do in terms of system reform (quite easily) to alleviate the issues. It strikes me that the people that issue these ridiculous statements know nothing about the way their system works.
Why should a Landlord not be able to choose who occupies their property, why should they not have the right to negate any risk to their substantial investment when choosing a tenant. Why should a Landlord have to hope that a tenant passes on tax payers money intended for rent after the tenant receives it directly in to their own account. Why should a Landlord possibly have to face not being able to sell a property or worse move back in to it when he chooses because a local authority tells their tenant to stay until after an eviction process is completed.
Speaking as a Landlord I have housed HB tenants in 2 of my own properties for a number of years, have built up a good relationship with them and I trust them, however I am fully aware of the pitfalls….not least the fact that I will have to evict via courts/bailiffs should I ever want to sell. I took on board the risks and was fully aware of them from the outset.
As an agent I can say to myself I have been lucky….I have dealt with many other HB tenants on behalf of my clients where the tenancies have not run as well….not always through the fault of the tenant but of the way the system works. I recently had a case where a family urgently (due to health issues) needed to move back in to what was their former family home….to cut a long story short 4 months after they actually needed it back they were finally awarded possession with month’s worth of arrears, their own temporary housing and legal costs to pay…..and a total property refurb needed.
As an agent how can I knowingly subject a Landlord to this kind of risk without warning. I would be negligent if I didn’t fully explain to a client the risks of accepting HB and the ridiculous way the system treats Landlords. Once the system is explained if a Landlord chooses not to accept the risks that should be his right….it is not discrimination….just an informed and sensible business decision.
Your first comments…. because it’s all about the votes ! Nothing more
government know precisely what’s going on and why landlords don’t want DSS but sadly landlords are outnumbered 10 to 1 by tenants so they are the most important people to impress at any cost.
Landlords must endure one crazy policy after another as government chase the generation rent votes at any cost
‘YOUR HOME IS AT RISK IF YOU ARE UNABLE TO KEEP ON TOP OF MORTGAGE PAYMENTS.’
Lenders have a strict financial vetting process so why not landlords?
The whole financial sector is based upon peoples ability to repay a loan/debt on time thereby discriminating between wage and benefits assistance?
Perhaps Shelter ought to consider spending their time lobbying the Government and a benefits system that place 60% of rent claimants in arrears?
Nuts …
The landlord has the right to choose who they wish to rent the property to. They carry the risk and are perfectly entitled to stipulate any conditions that does not break the law. All this will do is push DSS under ground. What will it achieve? Time wasting for everyone and at a time where the industry has been hijacked by banning justifiable tenants fee’s (not outrageous). Will it help DSS from renting? …… tenants will fail on grounds of adequate credit profile, sample principle as in loan arrangements. “Sorry M8 you can’t prove guaranteed and sustainable income.”
The whole idea is nuts, just nuts. When government take action to criminalise tenant behaviour and go after the tenant for claw backs, not the landlord who has provided the service, then it may be someway to considering “NO DSS”. Whoever in government is listening to the idea, needs to be sacked.
We don’t ever advertise NO DSS, it just seems like bad manners to me and not all DSS is the same. But how come Zoopla is encouraging its advertisers to not stipulate NO DSS, but allowing us a box in our back office software “Jupix” to do it anyway.
Landlords who work hard themselves to be able to purchase a property, should not, under any circumstances be told that they should let their hugely expensive asset to a higher risk tenant. It is very easy for Shelter and other lobbyists to push their agendas when it is not their money at risk !
As an Agency, we have always advised our Landords to considered DSS when supported by a suitable guarantor. This demonstrates that another person who is willing to take financial risk and showing their support for the applicant.
How about ensuring ALL GUARANTEED LEVELS of rental payments are sent directly to the Landlord each month – this alone would give most Landlords the confidence to allow DSS applicants ?
Put simply, most Landlords only want the rent paid promptly and the property to be well maintained,nothing more !
All my mortgages and I mean all of them (pre-crash mortgages) state that I can not rent to DSS.
Some of these are in fact now government owed as MX mortgages.
If I go against this mortgage stipulation, will the government indemnify me?
Recent changes to take effect in June is going to make it harder for all tenants but particularly dss tenants. Thanks to Shelter and generation rant policies. When will this government realise big stick no carrot will not work. Even the courts keep showing how the government are bad legislators.
To be honest, removing the phrase no dss or similar will not make any difference to who gets the property, it will just waste the time of the person calling in and the time of my overstretched staff explaining about affordability. I personally get very cross when an applicant phones in and quotes their income as £1,000’s a month when in reality they are recycling the tax that I and my staff have worked hard to pay along with our bills!
I’ve said it many times before but here goes again – when we were younger we worked part time jobs in the evenings and weekends to ensure that the mortgage rent and bills were all paid. We got no “top ups” from government. Nowadays it is an expectation of a generation that government will subsidise them through life and that they will never have to be responsible for themselves; if I hear those words “I’m entitled to …” one more time! LIVE WITHIN YOUR MEANS!
Just this morning our accounts have wasted hours talking to tenant and local council after an underpayment arrived from the council and we asked the tenant for more top up than before. The tenant would have been aware had she opened the council notification email but she didn’t so now the landlord will have to wait for the balance whilst she sorts out her finances! That is why we/landlords hate the system!
3 points Ms Wheeler might like to ponder on.
1. “For example, tenants are always in rent arrears because benefits are paid in arrears rather than in advance, and there’s the possibility that should a tenant make a mistake in their application for Universal Credit, the Department for Work and Pensions could ask the landlord to repay rent many months later – what is known as clawbacks.”
Absolutely!! I’m not aware of any council going to Tesco’s and demanding a clawback of any benefits spent on groceries. So if you want to end discrimination this would be a good place to start wouldn’t it?
2. Just cut the cr4p. Stop taxing landlords on a cost. How do you expect them to house people on low incomes when this crazy tax law is in place? If Ms Wheeler is looking for ‘immediate change’ start with that.
3. Make it much easier, quicker and cheaper to get rid of a bad tenant.
add to that councils incite contempt of court by encouraging tenants to wait for the bailiffs before leaving adding around 1 to 2 months of extra losses to the landlord. Whilst cutting deposits and adding referencing cost etc. The government is off its poor little head. Total idiots.
What a pointless debate, this is nothing other than the latest generation rent vote winner from the government
Removing adverts that say no DSS will not get one more person in this category housed, landlords can still reject for a multitude of reasons, Landlords should be allowed to choose who they deem to be the lowest risk tenant, it is their property. Not with standing the fact that 61% of the tenants in this category are currently in arrears to the tune of £2300 according to the RLA
You could argue that having no DSS on the advert at least stops the applicant wasting their time at the moment