Recent research suggests that housing benefit claimants are being discriminated against by private landlords. The National Housing Federation and homeless charity Shelter, have found that ‘at least’ one-in-ten properties advertised for rent online, specifically state that those in receipt of Government housing benefit will not be considered.
Indeed, their joint research and analysis shows that of 86,000 property rental adverts online, some 8,710 adverts, for different properties in England, included the detail “no DSS” or “no housing benefit”.
While that may seem like outdated and clearly discriminatory, there is currently no law or regulation that states it is unlawful practise. That’s because people in receipt of housing benefit are not a ‘protected characteristic’.
Why do private landlords prefer private renters?
There are a variety of reasons that private landlords give for not renting to tenants in receipt of housing benefit. The two most common ones are:
- The Government pay rent in arrears and frequent changes to rules can quickly and easily push tenants further into arrears.
- Insurance terms and conditions stipulate no tenants in receipt of housing benefit.
When considering these two details, it is likely that in many instances, landlords aren’t actually discriminating against potential tenants who intend to pay at least part of their rent via Government provided housing benefit. Rather, it’s the circumstances around the payment from the Government, that is the problem.
Afterall, for most landlords, the rent they receive is used to pay any mortgage and fees related to the property, before moving the remainder of the rent, into their savings or investment vehicles. If by having a housing benefit recipient as a tenant means their tenants is frequently in arrears, then the costs of the property are then borne by the landlord.
And that’s not something that can work on a long-term basis for a BTL landlord. No matter how understanding and financially organised they are.
However, while refusing to accept tenants who pay their rent with housing benefit isn’t currently considered direct discrimination, it’s possible that it could be construed as indirect discrimination.
Earlier in 2018, a tenant, Rosie Keogh, brought a case against a lettings agent for sex discrimination after she was refused a tenancy because she was a housing benefit recipient. The case was settled out of court, according to the BBC and the indirect discrimination claim that was made, has yet to be formally tested in a court of law.
However, that Ms. Keogh won compensation suggests there was enough evidence to support her case, had it gone through the courts.
Her case was that because the majority of tenants claiming housing benefit are women and single mums, discriminating against housing benefit tenants is indirect discrimination against women. And, sex is a ‘protected characteristic’.
Of course, if your insurance terms explicitly state you can’t rent your property to people in receipt of housing benefit, you’re in a difficult position.
For those landlords whose insurance doesn’t include this stipulation, its perhaps sensible to assess each application on its own merit. Just because someone receives housing benefit, doesn’t mean they can’t afford the rent or that they will always be in arrears. In many cases, benefits are only used as part payment and a working tenant who has a flawless tenancy history is as likely to continue to remain a reliable tenant as a private tenant with an equally positive reference and payment history.
To ensure you don’t ever fall foul of a claim of discrimination over your tenancy practices, the best option is likely to look at each tenant’s application on an individual basis – provided your insurance terms allow you to do so.