Housing Benefit:

A recent study by housing charity Shelter and the National Housing Federation claims that 60 per cent of landlords are discriminating against those claiming welfare – HB tenants

According to evidence collected by the joint study, it is common for landlords to advertise for new tenants with the qualification that warn: “no DSS” or “no housing benefit”.

The NHF, using what would appear to be quite provocative language to describe the practise, compares these ads to the “No Irish, No Blacks, No Dogs ”, highly offensive terminology used by a tiny minority of landlords decades ago.

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The NHF says it believes these “No DSS”, commonly displayed ads, could be illegal under equality laws, this, despite the conclusions of a recent House of Commons briefing paper which finds the practice not to be illegal.

The briefing paper considered evidence of private landlords’ reluctance to let to prospective tenants in receipt of Housing Benefit/Universal Credit. The paper looked at the reasons behind this reluctance and why refusing to let to benefit claimants is unlikely to amount to direct discrimination.

Discriminating against Housing Benefit claimants?

“It is not unusual for private landlords to advertise properties to let stating that they will not accept applications from HB claimants. This often raises the question of whether such restrictions amount to unlawful discrimination. It is unlikely to amount to direct discrimination as income and employment status are not protected characteristics under the Equality Act 2010,”, says the House of Commons briefing.

But could it result in indirect discrimination?

One theory being expounded is that women, single mothers particular, and the disabled are disproportionately dependent on welfare and therefore maybe victims of indirect discrimination violating the 2010 Equality Act, because of this practise.

Figures revealed show that women make up 59.1% of adults in households claiming housing benefit in England’s private rented sector, whereas women account for 50.6% of the population, and 12.7% of claimants in the private rented sector claim disability-related benefits, compared to only 5.2% of the overall population.

A recent case, the Rosie Keogh case claimed that an agent’s refusal to let to Ms Keogh’s case was that a blanket discrimination against ‘DSS’ applicants and was therefore indirect discrimination against women, particularly single women.

After receiving help from Shelter, Ms Keogh was able to settle her claim with the agent out of court for several thousand pounds. So, as the case was settled out of court no precedent was set and so no ruling as yet which can be relied on in future.

Perhaps a very relevant question here is, why do landlords refuse to let to Housing Benefit claimants?

Historically, landlords were reluctant to let to HB claimants, the paper concludes, because of delays in processing HB applications, but since April 2008 a key factor influencing landlords has been the introduction of the Local Housing Allowance and the requirement that this, except in certain specified circumstances, is paid to claimants rather than landlords.

Restrictions on the level of LHA paid to claimants were introduced by the Coalition Government in April 2011, changes which led various housing bodies, including representative bodies of private landlords, to argue that HB claimants were being priced out of the market.

Further restrictions have since been introduced, for example, LHA rates having been frozen since April 2016 and will remain so until April 2020. This has added to landlords’ concerns about the gap between LHA and market rent levels.

Other factors cited as reasons for landlords’ reluctance to let to HB claimants include:

  • Fears about the tenant’s ability to pay rent.
  • Fears that the tenant will prove to be a ‘bad tenant’
  • A desire to avoid dealing with the local authority
  • A prohibition on benefit tenants imposed by their insurer or mortgage company
  • Concerns about delays in the court eviction process should it be necessary to evict
  • Uncertainly around the roll-out and implications of Universal Credit;
  • The payment of Housing Benefit in arrears;
  • Restrictions in mortgage agreements and insurance requirements; and
  • Tax changes resulting in landlords focusing on “less risky” tenants.

The Shelter and the National Housing Federation study found that in North Cumbria, 59% of adverts they analysed said “No DSS”, compared with 35% in Gloucester and 29% in Weston-super-Mare.

Nationally, around 10 per cent of ads. for rental properties “are likely to be advertised unlawfully by explicitly discriminating against people who rely on housing benefit”, say Shelter and the National Housing Federation.

A shortage of social housing following the decline of council housing and higher house prices have led to growing numbers of people being forced to rent privately. Many depend on housing benefit, even when in work, with more than 1.4 million claimants across England.

©LandlordZONE® – legal content applies primarily to England and is not a definitive statement of the law, always seek professional advice.

11 COMMENTS

  1. So, Polly Neate, following the aggressive campaign from Shelter supporting and actively pushing for Section 24, the hens are finally coming home to roost.
    Do you really think LLs are so stupud to run the double risk of

    a) the likelihood of tenants not paying the lha to the LLs, and
    b) then having still pay the mortgage interest due on their property after calculating their tax due.

    Seriously, Shelter needs to examine thier narrow minded jealous, envy ridden conscious, and start supporting LLs instead of treating them like vermin. Shelter needs LLs. You don’t house the homeless, you just hate the prs.
    How did you think S24 was going to turn out then? Councils are on their knees with emergency homeless bills. Those housing bills will bankrupt LAs. Some already.

    Have you equally not been aware of the Irish gov situation exactly like what is happening here. They finally saw the light and have cancelled their own version of S24.

    That’s what you should be doing. Campaign for reversal of S24 and reintroduction of direct dss rental payments to LLs, in advance, not 2 mths behind please! LLs need to eat too, you know and, they too have families.

    Shame on you, Shelter.

  2. Absolutely crazy situation and it’s possibly bigger than the figures tell… When I moved a few years back agencies were telling me that none of their landlords allow housing benefit / benefits. And about 90 percent of the houses I tried were the same… But it is a more affluent area than average… It was very hard to find a house and we ended up with a bad agency and landlord that don’t sort things out for ages… Due to basically almost no choice… Banks definitely need to change thier policies as well! Or how about a history / record showing how good the tenants are? 🙁

  3. Please urgently reissue the letter of November 2017 calling for an end to the LHA freeze, with original signatories and more, and keep up the pressure on government. Local Authorities and others, including many charities, are surely spending more dealing with the fallout from this disaster than it would cost to bring the LHA more in line with rent levels.

  4. It would be interesting to see data relating to the percentage of housing benefit tenants who are currently in rent arrears with their landlord vs those who aren’t. In my experience the housing benefit can be delayed or stopped due to factors relating to the claimant (reasons I don’t know), that then result in arrears which can’t be cleared / are slow to be cleared due to income.

  5. perhaps when the state are prepared to sign the tenancy agreement and take responsibility for the actions of the occupier instead of the perspective tenant, landlords like myself will be more prepared to take on DSS tenants.

    The way the system is at the moment is the landlord takes all the risk.

  6. My insurance company restricts tenants to professional/working. When queried provision could be made to include DSS – at a higher premium as they are considered a higher risk. On that basis rents for DSS would also need to carry a premium as they are a higher risk. !

  7. Landlords should have the right to choose their tenants; it’s their property after all. And I’ve been badly stung by an awful tenant who just pocketed the housing benefit until they were 8 weeks in arrears and then I could get it paid to me. I gave them notice under section 21, and they left the house in a dreadful mess. Never again!

  8. my other tenants also don’t want housing benefit claimants as being at home rather than out at work means they are heating the houses unnecessarily. It causes an imbalance between tenants which I am reluctant to have. Paying tenants direct where they get into arrears, then changing it to landlord payments have caught me out on several occasions as later the councils said they had overpaid AFTER the tenant had left, claiming the overpayment back from me despite the fact that person HAD been in my house and rent due. Why should I be required to pay back an overpayment because they had made an error in a claim? My rent should still be payable. Maybe a way of getting around this is to say ‘do not accept third party payments for rent without a guarantor’ then if the council is willing to undertake that they will pay the rent we are all fine!!

  9. Shelter & their like have no accommodation of their own & do nothing but make a public nuisance. All their money seems to go on funding themselves rather than the poor.
    Why do these numpties think that a landlord would prefer to let to someone who has no money to start with, will not pay any rent until at least 6 weeks after they have moved in & often have no deposit to protect the landlord from debts or damage?
    It is not worth pursuing a tenant for unpaid debts or damage cover as they have no funds & the courts still lean towards them.
    The councils help extend the mess by telling non payers to stay in the property until a court order evicts them. This results in more costs / losses to the landlord.
    As mentioned above even big business such as banks / mortgage companies & insurance companies charge more.
    So basically its not cost effective to let to anyone on benefits. We are not charities

  10. As indicated by many of the posts direct payment of HB when achieved is a massive risk for the LL.
    It is risky allowing tenants to receive the rent and risky for LL to receive directly.
    One very effective way for a LL to avoid ‘clawback’ is to ensure the HB tenant signs up to a Credit Union.
    The UC is then paid to the CU.
    Then to ensure that the CU makes relevant payments including the FULL contractual rent BEFORE the tenant is able to access the UC.

    Having a CU in between the tenant and LL means the LL will NEVER be subject to ANY ‘clawback’ WHATSOEVER!
    The DWP will need to claim from the tenant which of course they will never receive.
    If the tenant has a defective claim then that is NOT the fault of the LL.
    I know of a LL that had to repay over £13000 of HB due to a defective HB claim.
    LL should NEVER accept direct payment unless they are evicting.
    Using a CU is a far more effective way of protecting the LL and tenant from the vagaries of the UC system.
    The added advantage of a CU for the tenant is that it ebcourages far imoroved money management and facilitates potential loans for CU customers.

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