Please Note: This Article is 4 years old. This increases the likelihood that some or all of it's content is now outdated.

Mortgage Lending:

The Residential Landlord’s Association (RLA) says Urgent action is needed to tackle discrimination against benefit claimants because buy-to-let mortgage providers are refusing loans.

Northern Ireland landlord Helena McAleer has had the mortgage on her rental property revoked because she is renting to a benefit claimant.

After contacting her bank, Natwest, she was told that the value of her property had increased and that there was a potential that she could release equity from the house. But after further discussions with the bank, she was told that she was no longer eligible for her buy-to-let mortgage from Natwest as it was the bank’s policy not to allow rentals to benefit claimants.

The bank’s buy-to-let eligibility criteria notes:

“We will not consider multiple tenancies, Homes of Multiple Occupancy, bedsits, DSS tenants or ‘Related Person’ tenancies.”

Following this experience with her bank, Ms McAleer has since started a campaign on Facebook in which she writes:

“I was beyond disgusted by the statement. Actually more than that I cried my eyes out for hours, how could a bank, a person at a bank make the decision that I had to kick someone out of their home simply because of their circumstances, because fundamentally that’s what they are asking me to do.”

Ms McAleer has also started a petition calling for measures to tackle such practices which clearly discriminate against benefit and Universal Credit claimants.

Research carried out by the Residential Landlords Association’s (RLA) mortgage consultants, 3mc, last year found that 66 per cent of lenders representing approximately 90 per cent of the buy-to-let market do not allow properties to be rented out to those in receipt of housing benefit. This includes TSB, Virgin and the Natwest.

In a letter being sent to the Treasury Minister responsible for banking, John Glen MP, the RLA is calling for:

  • The Government to use the influence it has in those banks in which it currently has shares to end such discriminatory practices.
  • The Financial Conduct Authority (FCA), working with the Bank of England, to undertake a full investigation into the extent of this problem and prepare plans to end it. The RLA believes such practices breach a number of principles within the FCA’s ‘Treating Customers Fairly’ agenda.
  • The Equalities and Human Rights Commission to undertake a review of whether such practices breach equalities law.

David Smith, Policy Director for the RLA said:

“With growing numbers of benefit claimants now relying on the private rented sector, it is shameful that many lenders are preventing landlords renting property to some of the most vulnerable in society with little or no justification.

“The Banks have had long enough to get their house in order. It is now time to take firm action to stop such unjust practices.”

Natwest’s lending criteria website can be accessed here  – It states under the buy-to-let eligibility criteria: “We will not consider multiple tenancies, Homes of Multiple Occupancy, bedsits, DSS tenants or ‘Related Person’ tenancies.”

Ms McAleer’s Facebook campaign page can be accessed here  – The petition is available here

Details of the research prepared for the RLA on lenders preventing landlords renting to benefit claimants can be accessed here

Details of the Financial Conduct Authority’s ‘Treating Customers Fairly’ regime can be accessed here

Please Note: This Article is 4 years old. This increases the likelihood that some or all of it's content is now outdated.


  1. There are a large quantity of landlords that are supportive of lenders not allowing benefit claimants to be granted tenancies with buy-to-let properties. After a recent out of court settlement made by a letting agent for a sexual discrimination action because it was claimed that most Housing Benefit claimants are female, landlords wouldn’t want to potentially face similar discriminatory action when their decisions are based purely on business best practise which intends to minimise risks and maximise returns on their investments.

    It’s not rocket science to want to choose tenants with greater affordability and who are more likely to meet rental payments on-time, avoid accumulating arrears, not going to end in debt retrieving action and/or evictions through the courts and not end up with bad debt write-offs.

    Also, landlords want to choose tenants for reasons such as ones who are more likely to adequately heat and ventilate their properties in order that they are able to be maintained to a higher standard and avoid resulting in the unnecessary repair costs for example.

    A small landlord is very often not well positioned to be able to defend potential discriminatory action that would only really be abusing what was their prudent and wise business sense decisions. Landlords want to make these decisions for the very same reasons lenders make these clauses with buy-to-let mortgages. Landlords would be fearful of facing discriminatory action being taken against them, they wouldn’t be able to advertise with such wording as ‘No benefit dependencies will be considered’, and they would also have to potentially waste a lot of time in arranging viewings and showing people their properties knowing that they are not strong enough applicants to support their tenancies.

    Surely the answer for benefit dependent tenants lies somewhere else other than forcing landlords to have to take unnecessary risks with their investments.

  2. As a small private landlord renting long term to families, I am starting to get in a situation were tenants a reaching retirement.
    The tenants move on to housing benefit, which is, as we all know, nowhere near present market levels.
    In one case the benefit rent is now £3000 a year less than adjacent properties.
    If private renting is so profitable, even at benefits levels, why is it that no company in the UK is investing in building new properties for this sector?
    I look at my return of 3% with all the resulting work (then to be told this is not a business but an investment) and then look at lenders ie Argos charging 29.9% just for credit and I think we are all in the wrong business (or as the government (HMRC) says, investment!!!).


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