The House of Commons Library has published a paper considering evidence of private landlords’ reluctant to let to prospective tenants in receipt of benefits.
At one point not so long ago, it was quite common for private landlords and lettings agents to advertise properties to let stating that they will not accept applications from tenants on benefits i.e. ‘no DSS.’ This restriction, whilst not direct discrimination under the Equality Act 2010 could certainly be indirect discrimination in some cases.
The briefing paper therefore looks at why landlords have refused to let to tenants on benefits in the past and why this problem appears to continue today. Initially it appears that landlords were reluctant to let to landlords because of delays in processing housing benefit applications. Landlords feared that delays would result in rent arrears which tenants may struggle to settle, and benefit agencies may refuse to settle. Matters only got worse in April 2008 when tenants began receiving benefits direct following the introduction of the Local Housing Allowance. Furthermore, the coalition government in April 2011 introduced restrictions on the level of benefits paid which saw in some cases a disparity between rent levels and benefits paid. In fact a recent Shelter analysis has found that benefit rates for 2 bedroom homes do not cover the full rent charged in 97% of Broad Market Rental Areas in England.
Other factors cited as reasons why landlords refuse tenants on benefits include:
- Uncertainty around the roll-out of Universal Credit;
- The payment of housing benefit in arrears;
- Restrictions on mortgage and insurance agreements; and
- Perception that tenants receiving benefits are more likely to demonstrate anti-social behaviour.
There is no definitive information on the extent of this problem however, reported landlord surveys suggest that there is an increase in the proportion of landlords refusing to rent to tenants receiving benefits.
No specific conclusions about landlords refusing to let to tenants on benefits are drawn in this paper. However, this is an issue in the spotlight and has seen the Work and Pensions Select Committee launch an inquiry into it only last month.