Around 50% of landlords say they wouldn’t be willing to let to tenants on housing benefits, according to the Ministry of Housing, Communities and Local Government.
Of the 4.5 million households living in rented accommodation, approximately 889,000 receive housing benefit, and potentially thousands more could be struggling to access the rental market if landlords are discriminating against those on benefits.
In response, the government is planning to investigate letting advertisements that discriminate against these tenants and clamp down on ‘blanket ban’ advertising, with the potential of having a total ban on ‘no DSS’ advertisements in the future.
The minister for family support, housing and child maintenance, Justin Tomlinson says: “Everyone should have the same opportunity when looking for a home, regardless of whether they are in receipt of benefits. With Universal Credit, payments can be paid directly to the landlord, and we continue to listen to feedback and work with landlords to improve the system.”
Mortgage lenders have a responsibility too
According to the Residential Landlords Association (RLA), over two-thirds of the largest buy-to-let lenders do not permit landlords to let property to tenants receiving housing benefit.
However, in a market leading move, Natwest bank has announced that restrictions on landlords with buy-to-let mortgages from letting to benefits claimants are to be scrapped.
Nationwide is another lender that doesn’t force landlords to discriminate against benefits recipients and is urging lenders, agents and landlords, to change this outdated practice. Paul Wootton, director of home proposition at Nationwide Building Society, says: “Everyone should be able to access a safe and secure home suitable for their needs. The continued presence of ‘no DSS’ restrictions in the private rented sector is unfair and denies this right to a significant group of people”.
Landlords should assess tenants on a case by case basis
The RLA’s own research has found that the average amount owed by tenants in receipt of universal credit had increased from £1,600 in 2017 to just under £2,400 last year. Since many private landlords are small scale and rent arrears do cause them problems, it’s understandable that they would prefer the security of a tenant that will pay rent in full, on time and have the financial means to pay for any property damage.
However, the RLA agrees that blanket discrimination shouldn’t be tolerated. Landlords should assess prospective tenants on a case by case basis and not rule out letting to those in receipt of benefits.
John Stewart, policy manager for the Residential Landlords Association, says: “…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”.