An official briefing document for MPs has underlined the contradictory position the government has manoeuvred itself into over landlords and letting agents who advertise properties as ‘No DSS’.

The House of Commons Library document makes for interesting reading because, based on the facts, it lays the problem directly at the feet of the current government’s policies.

It is called Can private landlords refuse to let to Housing Benefit claimants?’ and is intended to inform MPs involved in the upcoming debates that will create the Renters Reform Bill.

As proposed, it “will make it illegal for landlords or agents to have blanket bans on renting to families with children or those in receipt of benefits”.

This initiative has largely been created by Shelter’s energetic lobbying, as well as its sponsorship of a landmark case in 2020 at York County Court during which a judge considered the case of a disabled single parent whose application for private rented housing was refused by a letting agent because she received Housing Benefit.

The judge agreed it was discriminatory, although the decision did not change the law.

Reluctant

But the briefing explains concisely why some landlords are reluctant to take on DSS claimants.

This includes the well-documented problems landlords face when interacting with the processing system that underpins Universal Credit housing payments, and the fact that payments go direct to tenants rather than landlords following the 2008 introduction of the Local Housing Allowance (LHA).

Other more recent factors include the freezing of the LHA from 2016 onwards until the onset of Covid, which has meant many ‘DSS’ tenants experience a significant shortfall between their benefit payments and the rent they pay.

Landlords also face restrictions on renting to these tenants from mortgage lenders and insurers and, as the document outlines, the recent mortgage interest tax relief reductions which have led many landlords to focus on less ‘risky’ tenants.

Read more: the ultimate guide to tenant referencing.

But in a move which is increasingly typical of some policy, blaming landlords for the situation is as the document lays bare largely of the Government’s own doing.

Nigel Lewis is Editor of LandlordZONE

12 COMMENTS

  1. I’ve read that document and nowhere does it mention how a landlord can recoup rent arrears and damages from tenants who rely entirely on benefits. Every single one of my tenants who have relied on benefits have left me with a filthy house to clean, rubbish and broken furniture to remove, pet damage, and arrears. I don’t have a hope of recouping the thousands of pounds I’ve lost because I let to ‘DSS’ tenants. The last one left me with a £7,000+ loss.
    This is why I no longer let to anyone who relies on housing benefit of more than £20 pcm, they must be employed and have a guarantor, and I’ll avoid letting to them if there is more financially better off applicant.
    I’m running a business which I rely on for my own income having worked hard, saved hard, and gone without to build my business up and I’m sick of losing money to ‘DSS’ tenants.

  2. Avoid the term DSS; LL should just specify as HA do that LL will NOT let to those with

    Limited Entitlement To Welfare Assistance

    LETWA

    LL are ENTITLED to take BUSINESS decisions.

    Letting to certain tenant types is sometimes NOT good business.

    It is for LL to determine their business risks as they perceive them.

    There are many left-wingers who disparage LL for incorrectly being subsidised by HB.
    They aren’t of course.
    HB is just used to pay for the accommodation services provided by LL.

    Without it those relying on HB wouldn’t have anywhere to rent in the PRS!

    These self same left-wingers then disparage LL for refusing to let to those DSS tenants!!!!!!!!!!!!!!!!!!!!!!!!!!

    But in the main most DSS tenants are good people.

    It is however the completely dysfunctional UC system which causes LL to not even consider such tenant types.

    Ultimately LL and HB tenants alike are victims of this dysfunctional system.

    Govt has NO 8ntention of making this system user-friendly for LL and tenants alike.

    I’d rather keep a property EMPTY than take on a DSS tenant.

    Nothing personal it is just BUSINESS!!

  3. I agree. The rent should be paid to the Landlord. Would they let someone live in their house for free while paying the mortgage? I don’t think so!!! They’re out of touch. Citizans advice tell the tenants to stay there untill they’re given an eviction notice adding more arrears to their bill👎👎👎

  4. Just like it is irresponsible for banks to put their customers into a position that they cannot afford, so it would be for landlords to do that for their prospective tenants. Landlords should only let to those with ample means to pay, as rents will surely rise & the tenant will need to be able to afford all of the rent rises coming up. Those who already need financial assistance from the state simply won’t be able to afford rising rents & putting them in a property that could cause them financial stress would be irresponsible. So it’s up to the state to house them. Perhaps they should stop selling off their housing stock asap?

    • “Stop Selling off their housing stock” and start building social housing fast you mean and in large numbers (100s of thousands) – pigs will be flying first. Oh and maybe Shelter could build some social housing too and become a social landlord – haha- more flying pigs!

  5. I will not rent to DSS, simple as. It will now cost £250 a month just for gas and electricity to power my property. I therefore know it will get cold and damp and more likely it will be my fault when black mould and damp appears in unheated rooms. Not the tenants fault I know, but not mine either. However, I have to foot the bills for the consequential outcome.

  6. I find it appalling that a socialist government should dictate to landlords who they can and can’t let their houses to. My view is that, whether it’s DSS, black people, white people, red people, homosexuals, metrosexuals, trisexuals, women, men, men with beards, women with beards etc etc – whatever your prejudice, it’s your property, so you should have the right to decide to whom you want to rent it.

  7. Question for you:

    A year or two ago I looked at what the local council pays – it seemed to pay a maximum fixed sum based simply on the number of bedrooms. My rent was a bit more than twice what the council were paying. Mine is a nice property with amenities so my rent is market. (Even so, I felt the council rents were under the market). My question is : I’ve never has the situation where someone on benefits has wanted to rent my place but if they did, given the massive gap between what they’d get and need to pay me, how would I know they could afford it?

    If LL cannot say “no-one on benefits” then that means people without ANY job or income can apply and how can you really satisfy yourself they can afford it because, how WOULD they afford to close a £600/month gap (every month)? They’ll rock up, move in and then it will take months to get them out for non payment of rent??

    There must be more to this mechanism than I am thinking?

    • you simply state what your rent is and then ask what their income is as part of your pre-tenancy application form – you could also ask for last 3 months bank statements.

      when you are ready to reference someone – the one who can easily pay your rent or the one who cant – you will then get the evidence to support your decision to go with the higher income, non-benefit applicant.

  8. https://lha-direct.voa.gov.uk/search.aspx

    Follow this link to find the WEEKLY Local Housing Allowance for your area.

    Comes out to £483.68 pcm for 2 bedrooms in one of the areas I let property. The cheapest 2 bed flat in my portfolio in that area is £575 so a shortfall of £92 at current rates, the rent will go up to £600 shortly making the shortfall over £100pcm there is no way anyone on benefits can afford to make up the shortfall.

    I always make sure my rents are suitably high in order to deter Benefit claimants in the first place and will if necessary wait for suitable tenants to apply.

    Just as teh banks stress test mortgage applicants I do affordability checks to ensure anyone I offer a tenancy too can easily afford it.

    • It is IRRELEVANT what the LHA allowance might be.
      Affordability is based on the OBC or UNLIMITED HB if the tenant works a minimum of 16 hrs pw.

      A tenant can decide to pay more rent from their other benefits than just the LHA.

      It would just mean they have fewer benefits to spend on lifestyle.

      One has to consider what the monthly welfare wage could afford.

      It is up to the tenant how much of the welfare wage they determine to spend on rent.

      Remember it is the total welfare wage HB tenants have to pay rent NOT just the LHA.

  9. I have let properties to DSS tenants and it worked perfect for 20 years when the council managed the benefit payments and i had a point of contact and could see someone face to face with my tenants.
    Since UC payments started and tenants got my rent to spend on TV’s, drink, holidays, motorbikes etc etc i have lost about 10 thousand pounds over 3 years as UC is of no help and it takes many months to get shot of them not to mention our useless eviction system.
    I no longer accept anyone claiming UC unless they are over 40 years old. But aim for those who are working, particularly now as i am having to increase rents and HB is frozen so it is unlikely someone on UC can afford these increases to cover energy costs.

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